Imitation, The Best Form of Flattery?

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April 4, 2007 | Stocks | | Author Asif

A couple of months ago, I decided to feature an Irish medical research company called ICON plc (ICON) in the February 2007 edition of my free investment newsletter. The focus of that newsletter was closed-end funds and while I decided to add ICON to the SINLetter model portfolio, I was only able to write very briefly about the company due to time constraints. There was very little mention about ICON in the mainstream financial media and the only reason I discovered this company was because I noticed its hiring activity while looking for a new IT project. A few days after writing about ICON, I noticed this article on SeekingAlpha by Mr. Hans Wagner, who runs a subscription based stock picking website called Trading Online Markets.

While I was surprised that someone else decided to write about this little known company shortly after I wrote about it, I was thrilled to see that Mr. Wagner’s article covered ICON in greater detail and I mentioned it to subscribers in the portfolio performance section of my March newsletter.

A month later, I decided to write about EMC Corp (EMC) in the April 2007 edition of SINLetter primarily because of EMC’s decision to file an IPO for its subsidiary VMware this summer. Imagine my surprise when I noticed this article about EMC in SeekingAlpha by Hans Wagner less than a week after I sent my newsletter out to subscribers.  I was not surprised by the fact that Mr. Wagner decided to write about EMC and the VMware IPO, which was commonly known to many market observers, but by the actual content of his article. To illustrate my point, check out the following paragraphs from my writeup about EMC,

“Beyond the data storage business, the reason I am interested in EMC is because of a subsidiary of EMC called VMware that was acquired by EMC in 2004 for $635 million. VMware sells virtualization software that allows companies to run multiple “virtual” machines on a single server or on distributed hardware. Virtualization allows companies to utilize hardware more effectively and this is something that is very appealing to power conscious large enterprises. AMD took market share from Intel primarily because of its power efficient line of server chips last year (if you live in the San Francisco bay area, you may have seen the huge AMD billboard on highway 101 advertising this fact). Beyond hardware efficiency, VMware also allows companies to rapidly deploy and easily maintain these virtual machines. VMware is expected to have sales of over $1 billion this year and is sometimes referred to as the fastest growing software company on the planet.

EMC has decided unlock value in its VMware subsidiary by deciding to file an IPO for VMware this summer, representing 10% of its stake in VMware. EMC’s IPO of VMWare could be valued anywhere between $600 million to $1 billion, giving VMware a valuation of between $6 billion to $10 billion. This is more than 10 times what EMC paid for VMware just three years ago and represents close to one third of EMC’s $29.2 billion market cap.”

and the following paragraphs from Mr. Wagner’s article,

“The primary near term reason I am interested in EMC is their VMware business that EMC acquitted in 2004 for $635 million. VMware virtualization software allows companies to run multiple “virtual” machines on a single server or on distributed hardware. This allows companies to utilize hardware more effectively and this is something that is very appealing to power conscious large enterprises. Beyond hardware efficiency, VMware also allows companies to rapidly deploy and easily maintain these virtual machines. VMware is expected to have sales of over $1 billion this year. Some refer to VMware as the fastest growing software company on the planet.

On February 7, 2007 EMC announced they intend to IPO 10% of its stake in VMware sometime during the summer of 2007. This IPO of VMWare could be valued anywhere between $600 million to $1 billion. This would give VMware a market value of $6 billion to $10 billion, more than 10 times what EMC paid for VMware in 2004. EMC’s market cap is $29.8 billion market cap, making VMware worth a third of the company.”

People have borrowed my ideas in the past and I have borrowed ideas from other investors. In fact the famous investor and founder of Fisher Investments, Philip Fisher also mentions other investors as a source of ideas in his book Common Stocks and Uncommon Profits. But it is highly disrespectful to borrow both ideas and content from a free website without permission or acknowledgement and then make your subscribers pay for those ideas and content.

One might wonder why I would be concerned about my content being copied given that SINLetter is free and I allow websites like SeekingAlpha to redistribute my content. While I have not yet determined what I would like to do with SINLetter, I am trying to build a track record and traffic in case I decide to launch a fund or a subscription service in the future. Someone using my content without permission or acknowledgement does not help my goals in the least bit and can actually have a negative effect as illustrated below.

My content being reproduced without my knowledge has already happened twice in the past but I did not write about it on this blog. The first time this happened, a website was posting my entire newsletter without permission and all of a sudden SINLetter disappeared from search engine results because Google and other search engines imposed the “duplicate content penalty” on my website. I asked this website to stop posting my content and after a few weeks my ranking was restored on the search engines. Given that almost a third of my traffic comes from search engines, it can be clearly detrimental to have almost all your content copied by another website.

While I cannot claim that Mr Wagner did something similar, I felt that it was time I spoke up about this so that subscribers to websites like Trading Online Markets would realize exactly what they are getting for their money.

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  1. Ebi
    April 9th, 2007


    I may have missed the ICON article on SeekingAlpha that you refer to but I can swear to you that I read the recent EMC related article you mentioned just a few days ago and noticed striking similarities with the SINLetter Newsletter. What I found most astonishing was that not only did it contain the same researched points you mentioned, but the pattern of flow for the arguments and the run-through was almost in parallel with your article.

    Perhaps one idea towards countering issues like this in the future may be to archive the SINLetter Newsletter publicly soon after release (of course, only while you still choose to offer it for free). A back-link to via a comment on the imitated 3rd party article, may also help.

    Either way, I myself have been a pleased (read richer) SINletter observer for over a year now. I for one will sign up for a paid SINLetter subscription.

  2. Asif
    April 9th, 2007

    Thanks for your show of support Ebi. If it comes down to proving that I did indeed write the content a week earlier, there are more than 1,000 subscribers to back me up including the editors of SeekingAlpha and other journalists.

    We are considering creating a member area with forums, archived newsletters and other features and will post the newsletters there soon after it is sent out to subscribers.

  3. Geoff Gannon
    April 9th, 2007


    I’m sorry to see that someone seems to have appropriated both your ideas and (to a great extent) your words. I’m not sure I understand why they did this. Is it really worth it? The stakes don’t seem high enough to encourage someone to commit such a immoral act. I suppose I can understand why someone might resort to plagiarizing parts of a book or why a true idiot might need to employ plagiarism in writing his dissertation – but, why would someone commit plagiarism in this sort of situation? What kind of person do you have to be to so casually resort to such a terrible tactic?
    Have you notified Seeking Alpha of your suspicions? They should be told about this, because they wouldn’t be able to know that independently and they wouldn’t want to include his work if it is plagiarized. You should let them know right away.

  4. Asif
    April 9th, 2007

    Geoff, I am not sure I completely understand it either. As an editor who has to find two new investment ideas each month, I can to some extents identify with how difficult it is to find good investments at short intervals of time.

    The editors at SeekingAlpha received this blog entry by email and they tell me that they are taking this very seriously.

  5. David Jackson
    April 9th, 2007

    Hi Asif, Thanks for letting us know about this. We have strict policies about respect for intellectual property, and recently booted out a contributor who plagiarized material. We’re looking into this case seriously, as it is not only immoral and wrong, but also explicitly breaches the written agreement that Gold Standard Seeking Alpha contributors agree to:

    Thanks again for letting us know. We’ll get back to you as soon as we have investigated. David

  6. Geoff Gannon
    April 9th, 2007


    As someone who closed up a paid quarterly newsletter last year for lack of good ideas – I can identify with how difficult it is to find such ideas. But, it still shocks me that someone would do this. If this is true, it is unlikely to be a one time occurrence – a single egregious act committed by someone who always played “in the center of the court” as Buffett would say. I can only imagine this was someone who was accustomed to playing things on the line – and found things a little bit tougher and so he barreled right across the line.

    This is not the sort of mistake someone would make if they had always been a model citizen. I think this is more likely an instance of some rather loose morals to begin with combined with a touch of motive and opportunity in a tight spot.

    It really does shock me. Although I suppose there are so many people writing online that I shouldn’t be surprised to find there are will always be a few people doing something terrible like this within any community of this size. Unfortunately, it really does reflect poorly on all of us. The readers of this material, and Seeking Alpha who disseminated it, had know way of knowing its origins. That’s the sad part. They have no way, themselves, of telling someone like this – and what he puts out – from someone like you and me.

    That’s why it should concern all of us.

  7. Kevin
    April 9th, 2007

    Hey Asif,

    I certainly know you have a lot on your plate with the new job, the family, and with the time constraints putting out the Sinletter each month, and I would most certainly take issue with someone lifting my work.

    Also, I echo Ebi’s sentiments in that I would be more than happy to pay a subscription fee to benefit from your hard work and due dilligence. I honestly feel guilty being able to benefit from your work at no cost to me. Keep up the great work.

  8. Jonathan Bailey
    April 10th, 2007


    I am sorry to hear about your recent problems, I just wanted to offer to help. If you’d like to see about reporting this site to its host or perhaps striking back in another means, I’ll gladly do what I can. just send me an email.

    We might be limited depending on the format that the newsletter was distributed in, but there are steps that can be taken.

    Hope that you are doing well!

  9. Steven
    April 11th, 2007

    Been meaning to do this for a bit now seems to be a good time to help cheer you up.


  10. Asif
    April 11th, 2007

    Hey Steven,

    I appreciate your taking the time to review SINLetter. One of these days, I plan to complete the new book by Ken Fisher I won through your website.

    Kevin, I have enjoyed staying in touch with you through email for over a year now and your kind words are appreciated.

    Jonathan, thanks for your offer to help. The issue with Hans is resolved but if something like this were to happen again, I know whom to get in touch with.

  11. Malcolm Williams
    April 14th, 2007


    As you may remember from reading my strategy paper, I rarely do individual stocks. Right now I have one that falls into your area of expertise and I would enjoy your comments on a particular point. The stock is Lipid Sciences, LIPD, on the NASDAQ. It is only listed through the good fortune of a reverse acquisiton by a listed stock (Arizona Land and Cattle Company) that wanted to liquidate and reinvest. It will not likely have any product for a few more years. Right now it only has a good “story”, however, it has about 5 years of great management. They have been unbelievably good at managing their expenses while hitting all of their milestone targets and bringing in more investors as funds are needed to get to the next milestone, without giving the company away to the vultures. They also have a really outstanding web site which tells the story so well I will not repeat it here — Their market could potentiall run into the billions, or maybe zero. Any way, my question is how would you evaluate and time your acquisiton of such a stock? They have signed one interesting agreement with Eli Lilly (nice big name) in which Lilly wil fund all of the research and development for products targeted at animal health.

    Regards, Mal

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