How a teenager accelerated stock prices, to earn, and what does he earn now
Jonathan Lebed was born 29 September 1984 of the year, went to the most ordinary school, lived in the most ordinary suburb of the unremarkable American town of Side-Grove (state of new jersey). All in all, was the most ordinary child from a family with an average income.
But only until that moment, until the computer and the Internet appeared in the house. 11-the year old boy liked to surf the expanses of virtual reality, communicate with people and easily pretend, that he is not an ordinary teenager, huh ... yes anyone, just not an ordinary teenager. Having mastered the basics of programming, he made his first website, this experience will be useful to him in the future.
And soon the boy had a new passion - stock market. His father, middle manager, accumulated a small amount and invested in blue chips. Every day, like a good half of America, Lebed Sr. looked through the stock quotes with interest, letting go of "professional" comments. Jonathan also fell in love with looking at numbers that are still incomprehensible., after all, it was a great occasion to communicate with his father - a man, not prone to excessive sentimentality.
After half a year of passively watching quotes, Jonathan announced to his parents, that I would like to try my hand at trading. He took $8 thousand. from his savings account and asked his father to buy shares for him. First promotions, in which the beginner invested trader, were America Online, on $25 for pike. Which, despite the negative forecasts of analysts and the skeptical attitude of the father, grew in two weeks by $5. Then Jonathan sold them.
And then there was a competition, which CNBC announced for young traders. Jonathan called two of his friends, and the three of them began to trade. On the very first day of the competition, Jonathan's team took the lead, having managed to increase your portfolio by 51%. Then they steadily continued to be among the top three for three months.. However, a couple of weeks before the end of the competition, the three friends quarreled., and the results became much worse. But this nuisance did not prevent them from taking fourth place in the final ranking..
After the competition, Jonathan was first televised as a promising trader on his favorite channel, CNBC.. But he will succeed in becoming truly famous a little later..
Homemade news
IN 13 years old Jonathan convinced his mother to open an account for him with Ameritrade. Mrs. Lebed, impressed by the success of his son in the competition, tried to help the boy in everything. She was sure, that her son has a great future in trading.
For 18 months of trading Jonathan increased his initial capital from $8 thousand. to $28 thousand. At the same time, he creates his own website., dedicated to low-liquid stocks. The site was called Stock-dogs.com. He published everything there, what I found interesting about promotions on the Internet.
Parents tried not to interfere with the child in his hobby, Besides, for them, Internet technology was something of a fantasy. All in all, what exactly did Jonathan do, they did not know, main, so that he does not forget about his studies and does not hang around in the company of hooligans. They did not feel any danger in their son's hobby.. Until the phone rang ...
This was a call from a representative of the Securities and Exchange Commission. (SEC). He invited Jonathan and his parents to his Manhattan office for a serious conversation.. Scared to death mother, taking his son and calling to reassure his friend, who understands a little bit of legal intricacies, hit the road. Father, by then having had his first stroke, refused to go to the meeting. “You bought him a computer, here you can do it yourself ", he said to Mrs Lebed.
A rather strange company has gathered in a huge meeting room.: a SEC representative sat at one half of the table, armed with five lawyers, behind the other is a middle-aged woman, teen and numb man.
And the interrogation began. The SEC representative was interested in literally everything: where did Jonathan get his trading strategy from, how often he makes trades within the day, on what grounds does he write trading recommendations on his website and where does he get the corporate news published there. But most of all the SEC was interested in, whether Jonathan received any money from companies for posting certain news, which sometimes turned out to be false and provoked investors to buy stocks for no reason. Lebed Jr. assured, what is not, he did not receive money, and published news, being confident in their reliability.
This interrogation lasted eight hours.. After that, the morally depressed mother promised to continue to follow the "naive little boy", so that he does not climb where he should not. The SEC came to the conclusion, that Jonathan is just a teenager, non-threatening, and calmed down a little, but not for long.
On the same day, the Ameritrade account was closed. Mrs. Swan was unforgiving.
Daddy's account
But Jonathan continued to trade. How? Pride woke up in a stern father. How so?? How dare they forbid my boy to trade? And he does it so well. And Lebed Sr. opened an account in his own name, without saying anything to my wife.
Between September 1999 and February 2000 years Jonathan Lebed earned about $800 thousand. He later told, how did he do it. To begin with, he chose a target for himself - a low-liquid stock, which looked a little more underrated, than others from the same sector, and bought it. And the next day, a large-scale PR-project of this very action usually started. Jonathan's morning started at five in the morning. Before eight in the morning, he had to have time to write a bunch of ads on Yahoo's boards.! Finance. In order for the number of ads to be large enough, savvy teenager started multiple IP addresses and mailboxes. Besides, he wrote comments in trader chats. In one morning it was possible to place order 200 Messages.
In his messages, Jonathan tried to convince investors to buy a particular stock - that, which he bought in advance. Messages were written on behalf of various people. At first, Jonathan tried to write "smart" notes - like an analyst, talking about, how good the companies are and what a bright future awaits its shareholders. But I soon came to the conclusion, that emotional first-person comments work better. Like: “I bought these shares for my entire deposit!!!!!!!!!! I'm sure, they will grow up in the very near future ". And more exclamation marks, emoticons and bold.
Strange as it may seem, but investors believed all these messages and were in a hurry to invest their money in the "advertised" share. Don't forget though, that it was the end of the 1990s and people treated information from the Internet a little differently.
And Jonathan didn't even have to wait at the monitor, when stock will rise in price. He set take profit and calmly left for school. And upon his return, he often found several additional thousand dollars in his account..
Worldwide with the SEC and half a million to boot
But the SEC did not sleep. And soon filed charges against Jonathan Lebed for manipulating the markets.. This case is unique in the practice of the Securities and Exchange Commission, as never before has any charges been brought against minors.
Among other things, the case was widely publicized. Jonathan Lebed made a splash on the internet, by writing several posts. He assured, that he did absolutely nothing wrong, but sincerely believed in that, that stocks will go up, that's why I bought them. And then he shared his ideas with others. And then, that after some time after the growth, the price of "his" shares fell and a lot of investors lost money, so it's ok: someone always loses in the market, someone earns.
The trading world is divided into two camps: someone supported Quinoa, counting, that he is doing the same, that thousands of "official" analysts, and there is nothing wrong with his messages. And someone was sure, that Jonathan is guilty of manipulation, because he deliberately used fictitious names, and not just writing about my thoughts.
The climax of this story in October 2000 of the year was an invitation to Jonathan to broadcast "60 Minutes" on CBS. In addition to him, representatives of the SEC were also invited to this program., who promised to bring with them the real victims of Jonathan Lebed's manipulation, but for some reason the audience did not see a single victim that evening.
And the audience saw a verbal duel, in which neither side emerged victorious. Everyone has their own truth and their own reasons.. The SEC was not going to drop the charges and demanded the return of all illegally earned money, and Jonathan did not want to admit his guilt and, naturally, give money. There is only one way out - the court. Both sides, threatening each other with court, parted.
But, in truth, the case never came to court. IN 2001 year the parties did come to a compromise, suited everyone. Jonathan paid the SEC $285 thousand. on 11 "Illegal" transactions, but saved a fortune of half a million dollars. А SEC, in its turn, stopped chasing the young trader, but it seemed like a demonstrative spanking, to discourage others. Everyone is happy, everyone is happy.
Like this, in general,, not particularly remarkable story. Just a trader, just illegally earned. Few of them? Everything would be so, if not for a few startling facts. well, Firstly, the age of the "manipulator". This story showed, that with the advent of the Internet and electronic trading, everyone has unlimited opportunities. Lebed marked the beginning of a new era with his appearance, which brought its own laws and rules of the game. From now on, these laws and regulations had to be reckoned with..
Secondly, which is also important, this is widely publicized and conflicting opinions about, in general,, undoubted criminal act.
And thirdly, very interesting fact, that after all these problems with the SEC and negativity from the media, Jonathan did not give up trading. He was not afraid of possible difficulties and goes through life with his head held high..
In his area, after the broadcast of "60 minutes", he became a very famous person and even introduced a fashion for trading.. Sister, friends, classmates and even teachers began to trade. They listened with great interest to Jonathan's recommendations., and many claim, that you managed to make good money.
IN 2003 year Lebed made a new website Lebed.biz, with which he still sells his trading recommendations. Say, they are in good demand. A list of ten shares is posted on the site, which Jonathan recommended for a four-year purchase in November 2008 of the year (it is impossible not to admit, that the moment for shopping was more than apt). The average return on stocks from this list is − 264% per annum. Most (on 600%) shares of Ivanhoe Mines Ltd rose - companies, which is engaged in the development of copper, gold and coal mines in Mongolia (in the gobi desert), Kazakhstan and Australia.
However, Lebed has much more than ten investment. And he never stops talking about them.. So, Gulf Resources shares, exploration and development in Uganda, Kenya and Madagascar, from December 2008 to January 2010 years have grown by 1500%. “Gulf Resources is one of the greatest discoveries of my life, - Swan wrote in 2008. - You will never see these papers at this level again. I never told you to buy any shares. But here I advise you to seriously think about an immediate purchase and do it right now ". The day following this advice, Gulf Resources rallied from $0,88 to $1,36 and only grew further. Interesting, what, according to the annual reports of Gulf Resources (the quarterly company does not provide), and in 2008, and in 2009 it was unprofitable (respectively $4 million and $70 thousand. net loss). And since January 2010, the share price has already dropped from $15, on which the profitability was fixed 1500%, to $9.
Now Jonathan Lebed is under 30, and thinking, that he will have something to tell his grandchildren in old age. About that, how their grandfather stood alone against the SEC, managed to make a lot of money, as a teenager, hit the cover of NY Times Magazine, as they wrote about him in the book Next: Future Just Happened, and then, based on this book, the Air Force filmed a documentary movie. Yes, you never know what else will happen by that time ...
We can argue for a long time, who is Jonathan Lebed. A manipulative prodigy or just a smart kid, who managed to understand the intricacies of online commerce before the rest. We are unlikely to get to the bottom of the truth. But here's what is beyond doubt, so this is the fact, that Jonathan Lebed is an outstanding personality, which has every right to enter the history of trading.
Http Source://expert.ru/d-stroke/2010/14/geniy/
