Taipan's FAQs: Frequently Asked Questions

Stock price jumps before I can trade!

Why is it when I get my issue of Taipan and it has a buy recommendation for a certain stock, up to a certain price, that the stock has already jumped higher than that price on the day I receive my issue of Taipan? Three very good examples of this would be your 3 latest recommendations of FAIL, WMCO, and ELRNF. I now have limit orders placed on all three stocks and am unsure if they will get filled unless you raise your recommended buying price. And if that happens, you and everyone else who got the news "early" are reaping the benefits of me getting in at a higher price and supporting your profits. What are you doing to remedy this? Thanks in advance for your response!
- Mike Meerkreebs

Dear Mike:

You are addressing a problem we are painfully aware of: Many Taipan recommendations shoot up once the issue hits our members' mailboxes. Some even move beyond our recommended buying range before some segments of subscribers can call their brokers to place an order.

There's little we can do about this. It depends on the level of trust our subscribers have in our stock picking acumen. It depends on the market climate at that particular time. And it depends on the market capitalization and liquidity of the particular stock. Some soar. Some barely blip.

Taipan's format (the hard copy, that is) and distribution (U.S. Postal Service) strongly influence the way we arrive at our recommended buying range and investment horizon. The Postal Service plays a more influential role in determining when you get the information than we do at Taipan Headquarters.

That's why we decided to make an electronic copy of the issue available for Members Only here on the Website. "Wired" ubscribers will be able to download their issue at a time when most print subscribers receive their issue in the mail. Click here for a look at our editorial schedule.

We think this option will level the playing field for those Taipan members whose personal Cliff Claven has screwed up a profitable investment in the past. But we are in no doubt that even this measure may only reduce the response time between delivery and buy, not eliminate price spikes.

That's why we go to great lengths in determining your buying ranges. WE MEAN WHAT WE SAY! If a stock is recommended at under $10.25, DO NOT BUY AT HIGHER LEVELS. It would defeat the purpose. If a stock moves beyond our buying range, wait for it to come down. Taipan's recommendations have a medium- to long-term investment and profit horizon. Temporary spikes are nice. But they're not why we recommended the stock.

(If you want to profit from fast-paced, adrenaline-pumping short-term trades, subscribe to the Taipan Trader service.)

Last: many newsletters are thinly veiled frontrunning schemes.

Taipan isn't.

We have strict and ruthlessly enforced internal regulations against profiting from our own recommendations. Our editors - no matter if they are techie stringers or staff financial analysts - are not allowed a) to buy a recommended stock for their own or other portfolios before the information is published (i.e., in the hands of our members); b) not allowed to accept compensation or gratuities for making recommendations.

I would and will personally terminate any member of the Taipan Research Staff who breaks these rules. Please see our copyright page for more on our position.

Cordially,

J. Christoph Amberger, Publisher

How much do I need to invest?

I have just subscribed to Taipan after seeing your Website and reading the mailings. I have just graduated college, and wish to begin earning and accumulating wealth. Can you provide me with a ballpark figure of how much discretionary income I must have to begin investing using the ideas and recommendations in Taipan?
- Joshua McMichael

Dear Joshua:


There's really no ballpark figure I can quote you. Accumulating wealth is not so much a function of how much you start out with, but how aggressive you are and what stocks you pick. Of course, it helps to have gobs of money to start out with. But a lucky strike with a thousand bucks might net you as much as a modest dividend gain on ten thousand.

It is also less a matter of "disposable" income. Investing Taipan-style is not a luxury. It is a way of generating a sizable chunk of your annual revenues.

This means your starting capital ought to reflect how serious you are about investing rather than a set amount of dollars.

But since you asked, here's a thought: In many industrialized countries, the savings rate per household exceeds 10% of annual income. I personally made the choice of putting aside and investing a minimum 10% p.a. of my income since I was a freelance writer barely scratching 20K p.a. You can do it, too.

Plus, when you're young, you can afford to be more aggressive and risk-taking in the choice of your investments. Your chances of making up potential losses over time are pretty darn good ...

But in the end, it's a matter of *doing* not talking!

Good hunting!

J. Christoph Amberger, Publisher

Choosing the right broker

As a Taipan subscriber for almost one year now I have monitored and have been very impressed by the performance of Taipan's portfolio. Now, as I junior in high school, I am ready to start building a portfolio myself. Before I embark on this, I have a few questions that I would ask your guidance on.

First off, I would like to know if any information is available on the Taipan Trader Service. I saw it mentioned elsewhere on the site as a guide to "short-term, quick-profit" trades. As I am starting with somewhat limited capital, I would like to build my amount of available funds before investing in too many medium or long-term stocks.

Secondly, I would like your opinion on a good broker to start out with. I feel that the combination of a good broker and resourceful, to-the-point information are the only way to build a solid portfolio. I have been fortunate enough to find a perfect source of information already. If you could point me in the direction of an ideal broker as well, I would appreciate it greatly.

I would also ask your opinion on trading over the Internet. If you consider it a positive advancement, perhaps you could guide me towards a particular electronic broker rather than a conventional brokerage firm.

In closing, allow me to congratulate you on an absolutely spectacular publication, in addition to a wonderful website. I can see nothing but positive things coming from its addition. Over the past year, I've gained a deep admiration everyone involved in the publication of Taipan. As I marvel at the wealth of information provided in Taipan each month, I'm reminded of the following saying: "Performance is the result of dedication and attitude." I relate this to everything I do in life and I'm glad to see that I'm not alone. I look forward to your reply and thank you for your time.
- Spike Katora

Dear Spike:

Thanks for the flowers! I'm happy to hear that you like Taipan, and I promise we'll do the utmost to improve on the present state of affairs ...

Re: Brokers. We at Taipan are really agnostics if it comes to brokers. Ideally, they should execute trades at the least amount of cost and highest level of reliability. We have therefore been recommending discount brokers such as Chuck Schwab or Barry Murphy in Boston. (Barry was one of the first discounters who bothered to track down and trade foreign securities, even way back in the late '80s, when offshore investing was pretty much a monopoly of Taipan. Today, even Schwab brokers should be able to help you with most international stocks.)

Recently, I've heard a lot of good stuff about online trading - although I personally have been slow to switch. But I believe this is definitely the way to go in the future. (You really can't beat their commissions/fees ...) I think the entire US brokerage industry will do 50% of their business via the Internet within the next two years. That should be good news, particularly for our Taipan members in backward regions such as Western Europe.

Our special report, Taipan's Guide to Good and Bad Brokers, should help you in choosing the right broker.

Re: Taipan Trader. I'd love to sell you a $1,250 subscription to the Trader. Not only because it's a great deal for its quality of track record. (Our closest competitors sell theirs for $2,500 to $5,000, which much less spectacular gains ...) But also because I have the greatest confidence in James Passin's stock picking skills. After all, I hired him ...

But - despite gains such as last week's 40% in 5 days - make sure the expense of the service is in the appropriate relation to your investment capital. There's really no reason to shell out this kind of money if it only leaves you with a couple of hundred bucks to trade with. (James Passin, our Trader guru, thinks the minimum amount of investable capital should be $5,000 to $10,000.)

But your overall sentiment is correct: As a young investor, you can take higher risks in regard to short-term and speculative investments.

Again, thanks for your compliments. We'll do our best to live up to your expectations.

Cordially,

J. Christoph Amberger, Publisher