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From Wikipedia, the free encyclopedia:
"It is a common misconception that the phrase primum non nocere, "First, do no harm" is included in the Hippocratic Oath. It is not, but seems to have been derived indirectly from his Epidemics, in which he wrote, "Declare the past, diagnose the present, foretell the future; practice these acts. As to diseases, make a habit of two things—to help, or at least to do no harm."

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Yesterday, I posted an article about the intellectual challenges in producing a trading blog. In it I was basically saying that in pursuing my values of helping society, and doing no harm, I may in fact be doing some harm to myself.

Moreover, I might be putting myself into a conflict situation where I have to do something for myself that is, or could be interpreted by others as, opposite to what I have written.

It started a considerable discussion among readers, and I received a lot of direct advice or recommendations. There needs to be a lot more discussion.

The truth is, a blogger is not bound by any oath nevertheless by a medical doctor's Hippocratic Oath. That's good because there will be harm done. The issue, however, relates to whether there was any possibility of harm done via gross negligence or even intentionally.

I discussed this issue on Nov-22 when a reader asked me if I thought Barron's interviews touts.

The issue really is, what communication form meets a securities regulator's definition of "trading in securities" and under what circumstances is registration possibly required. As an extension of that, in today's digital world without borders, which regulator has top-level authority?

This morning my mail included one from Israel (re Cramer) and one from Chicago (re the BillCara.com blog) that led me back to this issue.

The article from an Israel newspaper discusses the ‘pump and dump' damage to a local company's stock caused by comments made on-air at CNBC.

In my view, the world is just starting to get a taste of the power of effective broadcast communications in a digital world. There needs to be regulation of some kind.

Eliot, SEC, are you watching?

Also this morning, I received a letter from a reader with the moniker g034:

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"Bill,

Back in October I was thinking about a community of Bill Cara readers and how their participation could enhance what you are doing. I also thought that a reader new to trading could put together profitable trading ideas by simply applying what you are teaching on your blog. With that in mind, I decided to use your protocol along with the free Value Line Reports that you discuss on your site to come up with a trade possibility. After simply placing data in a spreadsheet from the Value Line Reports, I came up with PFE as a good candidate. This is what I posted:

10/26/2005

Using Value Line October 21st 2005:

Pfizer currently is trading at $21.10 with a dividend yield of 3.6%.
Value Line has an average annual P/E ratio of 18 and a 2006 EPS Est. of $2.20 for a target price of $39.60. That would be a gain of 87.7% plus a dividend yield over the next 12 months of 3.6% equalling a TRO of 91.3%.

Bill's RSI accumulation zone is under 30.
Monthly RSI (14) is 28.6,
Weekly RSI (14) is 23.6,
Daily RSI (14) is 17.8,
60 Min RSI (14) is 31.8 and trending higher (7 over 14 over 21).

Value Line states that the biggest risks are "patent related anxiety", but the recent win in England increases Value Line's confidence that PFE will win patent battle in US. VL also gives PFE an A++ for Financial Strength and 100 for Earnings Predictability.

The stock has fallen very far and currently seems to be supported at the 1997 and 1998 breakout of $21. I like to use trendlines and Fibonacci as supports on Weekly and Daily charts, so my comfort level is not that great here, but if PFE rallies and fills the recent gap down, that's a 10% gain in itself.

I will be looking for two things to happen and I will then purchase PFE. A thorough trashing by CNBC or an upside break of the downtrend line which would bring a positive daily RSI. Now that I think about it, a thorough trashing of PFE on CNBC will be like the Jim Cramer trashing of MRK about 1 year ago which led to a MRK rally through the downtrend line and a quick profit of over 20% (as I recall).

Sure there are risks, but that's what diversification is for, or put writing.

So if others out there would be interested in posting trading "thoughts" based on sound analysis, let's see if Bill is interested in hearing from his students.

To put my money where my mouth is, I purchased PFE on November 3rd at $21.76. I took a little heat when it traded below $21, but the trade has worked out due to PFE winning a US court ruling on it's Lipitor patent issue. The stock traded up after hours and is at $25.25. Gain on the trade 16% at that price.

Feel free to use this as an example of how one reader applied what you teach towards their personal gain - without a "BUY" from you. Hopefully others will do the same.

Thanks,

g034"

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What g034 is saying is that it is good to join a "virtual investment club" of the kind that Bill Cara has organized, and if you stay within the rules and guidelines that have been set by Bill Cara (someone who has knowledge of securities law, and who has a history of helping people), then you can receive immeasurable benefits.

But is it fair that one blogger or one broadcaster set the rules? What happens if, heaven forbid, the participants suffer harm.

Although I have some ideas, I really don't have the answer to this dilemma. I am entitled to have opinions, and so I will continue to express them in my personal blog. But then again, so is Cramer entitled to say what's on his mind on CNBC.

The difference, I think, is that when "trading in securities" is practised as a business, where there is organized selling involved, i.e., where an audience is repeatedly encouraged to buy the same security, then some kind of regulation is needed.

For example, if Cramer, or anybody who is broadcasting, tells his audience to "Buy ABC stock" once, then I believe he should be prohibited from saying "Buy ABC stock" a second time within say a month. If, in a short time horizon an individual repeatedly tells a public listening audience "Buy ABC stock", then I believe that constitutes an act of "trading in securities". And I have watched Cramer and others do that.

In fact I believe CNBC is in the securities business every bit as much as any broker-dealer. They just have a slightly different business model " just like electronic brokers operate a different business model than full-service broker-dealers.

But there is clearly a difference between broadcasting and some blogs.

An independent blog " like mine - that fosters open dialog, where participants are given the freedom to make opposing argument and comment, (if that truly is the case) there is no need to regulate. The e-community will effectively self-regulate.

And if the community discussion becomes, let's say, less independent and objective, and ventures into the selling arena, then that community will lose participants. It will soon destroy itself.

There are no similar checks and balances on CNBC or Cramer. It is a fact that a part of their audience watches with the sole purpose of buying and selling the advice they hear, like "Buy ABC stock".

As I say, often harm is done.

Eliot, SEC, are you watching?