February 4, 1999

Some Foolish Humor

The recent move by several discount brokers to tighten trading restrictions on Internet-related stocks has angered more than a few investors. Louis Corrigan (TMF Seymor) explained the new regulations in a recent Fool on the Hill and offered his take on the controversial topic. One firm, Only You Discount Brokerage, took the restrictions more than a few steps further. Fool Rick Munarriz (TMF Edible) has an account at Only You and received the following letter from the chairman:

A Letter from Only You Discount Broker

Greetings Accountholders:

Over the past week the larger discount and deep discount brokerage houses have instituted new trading restrictions on a select list of Internet-related stocks. By tightening margin requirements and holding off on instant executions of these and only these companies it is the industry's aim to protect you from the recent whirlwind of volatility.

At Only You we initially scoffed at following suit. You came to us because you felt comfortable making your own investment decisions. The fact that a brokerage company, or NASDAQ itself, would make a valuation call and impose unique barriers under equity-specific cases sounded ludicrous.

At first.

After giving the matter some thought it dawned on us that this was a golden opportunity for Only You. Rather than follow the herd, we will now lead the herd deeper and deeper into this once unthinkable expedition.

So, effective at tomorrow's market open, Only You will institute the following trading restrictions:

-- While most brokerage houses have singled out the two dozen most popular Internet companies, we have run screens to filter out a much wider terrain. Any company whose name ends in dot-com will not be eligible for online transactions. That will also include the deviously deceptive practice of including COM in a company's ticker symbol like tiny Crowley Milner (Amex: COM) or the sinisterly suspicious 3Com (Nasdaq: COMS).

-- Our COMhunt continues through companies that begin with those three hype-inducing letters. Comair (Nasdaq: COMR)? Please. We're not sure what scares us more here, the Com or the Air. Comdisco (NYSE: CDO). Disco is dead, buddy; you're on the list. And Comforce (Amex: CFS), what are you trying to do, bully us? And, while you're at it, don't even think of Comstock (Nasdaq: LODE) -- even if the company alleges to be nothing more than a bank. Sure it is.

-- Any company, no matter how reputable in the brick and mortar sense, that has opened an online store will also be on the no-no list. Wal-Mart (NYSE: WMT), Gap Inc. (NYSE: GPS), even Costco (Nasdaq: COST)... sorry. Our new slogan is clear and simple. "All's not well that's HTML!" We will also incriminate through association. If the CEO of a Fortune 500 company has a daughter who creates a hobbyist home page for her lacrosse team, naughty naughty, that firm has a date with our restrictive shackles. We will err on the side of caution. We will err, so it is impossible for you to do so.

-- In the past our purpose was not to judge. Sure, we joked around the office when some confirmation slips went out, but that kind of merriment was second to our task of serving as an efficient service provider. Boy was that boring. From now on, when some questionable online orders are being placed, our interface will communicate in a revolutionary yet lifelike manner. For instance, say you enter an order to buy 100 shares of General Electric (NYSE: GE) at the market. This is what you can expect from our new trading system.

You have requested to buy 100 shares of GE at the market. Press any key to confirm your order.


Hey, are you serious? General Electric trades for 37 times trailing earnings yet has grown earnings at a third of that rate over the past few years. Press any key if you were not kidding.


Hmmm, we can't sway you, can we? Did you know that shares of GE tend to fall on days when CEO Jack Welch wears a dark tie. We think we saw him wearing navy blue this morning. Press any key if you really want to offend us and place this order anyway.


Budge will ya! How about trimming down that order to an odd lot of, say, 37 shares or so? Press any key to stick the dagger in way deep and complete your purchase of 100 shares of General Electric at the market.


Oh, I can't believe you! You will pay, chum. You will pay!

Pretty high tech, huh? Sometimes we won't even bother to discuss things with you. All buy orders for eBay (Nasdaq: EBAY) will automatically be entered as short sales. Good luck trying to sell a company we like around here, too. It just ain't gonna happen. No way. No how. So, sit back and enjoy your new enhancements. We are Only You and Only You cares.

Rick "JJ" Chester
Chairman, Only You Discount Broker

Related Links:
Fool on the Hill, by Louis Corrigan: "Margin Speedbumps"
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