NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / New Zealand

'Black boxes' can make money - if you sell them

Mary Holm
By Mary Holm
Columnist·
3 May, 2002 02:19 AM5 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

By MARY HOLM

After reading your contribution to the Herald, I get the feeling that regarding the share market you are not a "chartist", and therefore would have scant regard for any organisation which promotes such an investment system.

Shortly after becoming a member of Metashare International (which sells computerised share trading
systems), I had a growing suspicion that several claims and statements made by Metashare staff and promotional materials were unqualified exaggerations, and therefore misleading and perhaps fraudulent misrepresentations of the truth regarding the goods and services provided. This is a direct violation of the Fair Trading Act.

The Disputes Tribunal agreed with me, and ordered Metashare International to reimburse me $12,000, which they have done.

Perhaps there are other disgruntled Metashare International members who read your column and who also feel the Metashare International marketing was better than the Metashare International system they purchased.

I am willing to communicate with anyone seeking guidance and support on this.

I enclose an article by Colin Nicholson, president of the Australasian Technical Analysts Association.

In court, I asked the man representing Metashare if he had heard of Colin Nicholson. He answered, "yes", adding that Nicholson was very well respected in this industry.

I then read the article to the court. Perhaps you may have use for this article.

I certainly do. It is worth quoting at some length.

But first, we should note that the Disputes Tribunal found that "false representations were made as to the level of computer skills required, or which would be taught, to operate the system sold, the ease with which the system could be operated, the time involved to operate the system with someone not reasonably computer-literate, and the level of backup or assistance which would be given".

It goes on to say, "This is not a reflection on the efficacy or otherwise of the system."

I am not surprised that the tribunal did not want to go into whether the system works. I have been to a Metashare seminar, and it is not easy to follow what is going on.

However, the Colin Nicholson article you sent me makes some pretty decisive comments on the efficacy of "black boxes". And, from Nicholson's description, these are what Metashare sells.

Nicholson says he does not use a computerised trading system, but he is often asked about them, and he suggests some guidelines for potential buyers.

"There is a good discussion of software types in Trading for a Living by Dr Alexander Elder (Wiley), a book every prospective trader should read," he says.

"His view is that, 'Most black boxes are sold by hustlers to gullible or insecure traders. The only way to make money from a black box is to sell one'."

Nicholson goes on to say that there are very few black boxes developed by real experts. Those that are "are almost never for sale, because the owner knows their value is enormous and is best realised by using it to trade their own funds and/or managed funds.

"They are never advertised to the public or sold by high-pressure means."

The black boxes sold by "marketers", he says, "are the ones widely advertised, and sold by high-pressure means. They are always expensive, to pay for the marketing organisation and enrich the promoters.

"Wild claims are made about the performance of these systems. Maybe some of them will make you wealthy.

"Unless you are hell-bent on enriching the promoters, you must evaluate them before you buy. If you buy on the basis of a money-back or other guarantee, get legal/financial advice as to whether the promoting company is likely to honour the guarantee."

Nicholson says that if he were thinking of buying a black box trading system, he would want "anything I am told to be given to me in writing, or I would make complete diary notes of all conversations.

"I would consider tape recording any presentations. No honest promoter should object to this.

"I would ask for an audited track record of all actual trades over a reasonable period made using the system. I would contact the auditor and verify his or her report."

He also says he would want the system tested "over several different markets and over periods long enough to cover bull, bear and sideways markets".

And he would want to be able to "paper trade the system on several markets before finalising my agreement to purchase it".

Phew. After his earlier scathing comments, who would bother?

Far better just to give computerised trading systems a miss.

We don't see Metashare being advertised much any more. But there are other similar products being promoted.

Furthermore, some of Nicholson's points would apply to any investment products marketed through seminars, such as various property investments.

It is always wise to: check guarantees, tape presentations, test the system over good and bad markets, get an audited track record and speak to the auditor.

And it is always a good idea to question why the promoters are not simply investing their own money, rather than sharing their secret.

Thank you for telling us about your experience, and your offer to help others.

A final note: Don't throw the baby out with the bath water. Just because computerised share trading systems don't work well does not mean investing in shares does not work well.

Shares, and particularly low-tax, low-fees share funds, are good long-term investments.


* Mary Holm is a freelance journalist and author of "Investing Made Simple". Send questions for her to Money Matters, Business Herald, PO Box 32, Auckland; or e-mail: maryh@pl.net. Letters should not exceed 200 words. We won't publish your name, but please provide it and a (preferably daytime) phone number. Sorry, but Mary cannot answer all questions, correspond directly with readers, or give financial advice outside the column.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.
Save

    Share this article

Latest from New Zealand

Politics

Te Pāti Māori selects former broadcaster for Tāmaki Makaurau byelection

10 Jul 08:58 AM
New Zealand

Man sentenced for taking boy to secluded spot and photographing him without togs on

10 Jul 08:00 AM
New Zealand

State of emergency declared for Tasman region, severe weather warnings across NZ

10 Jul 07:04 AM

From early mornings to easy living

sponsored
Advertisement
Advertise with NZME.

Latest from New Zealand

Te Pāti Māori selects former broadcaster for Tāmaki Makaurau byelection

Te Pāti Māori selects former broadcaster for Tāmaki Makaurau byelection

10 Jul 08:58 AM

Move comes after MP Takutai Tarsh Kemp died last month.

Man sentenced for taking boy to secluded spot and photographing him without togs on

Man sentenced for taking boy to secluded spot and photographing him without togs on

10 Jul 08:00 AM
State of emergency declared for Tasman region, severe weather warnings across NZ

State of emergency declared for Tasman region, severe weather warnings across NZ

10 Jul 07:04 AM
‘Lock all your doors’: Neighbours recount gunman on loose after Hamilton homicide

‘Lock all your doors’: Neighbours recount gunman on loose after Hamilton homicide

10 Jul 07:00 AM
Solar bat monitors uncover secrets of Auckland’s night sky
sponsored

Solar bat monitors uncover secrets of Auckland’s night sky

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP