Review of “Rampaging Bulls: Outfox Promoters At Their Own Game On Any Penny Stock Market”

Rampaging Bulls: Outfox promoters at their own game on any penny stock market is an oddity, which can only be chalked up to the Albertan roots of its author, Alexander Tadich. It’s a well-branded book, full of gut-level advice on the obstacles any penny-stock trader will face; its goal, expressed clearly and reinforced repeatedly, is to help the penny-stock speculator avoid losses and make major profits. When described this way, the book’s contents sound like part of a standard category. What makes it idiosyncratic is the author revealing a definite moralist streak, expressed in words that could have come out of Newsweek in its tub-thumping moments.

Until a penny-stock analysis plan is revealed near the end, the book takes the form of a fictional narrative, whose details centre around a fictional promotion of a company called “B.H. Beane International” with a fictional product under development. Since the author’s thesis is that promotional strength counts for far more than company fundamentals in the penny-stock market, the narrative centers around the machinations of the fictional promoter of that company, Bob Holstein. Holstein is an archetypical “Rampaging Bull,” a master promoter whose character flaws make for a lousy manager, and a person who is too untrustworthy to be a friend. In addition to the main narrative, individual chapters are devoted to short stories illustrating other kinds of companies that trade on penny-stock exchanges and to “Mother’s Tongues Lashings,” full of advice on how to acquire the personal skills to be a successful penny-stock trader. The underlying companies of these stocks, to pass along a point, typically have neither revenues nor earnings, except for bank interest on cash in hand.

Mr. Tadich has seven categories for penny-stock companies: “Waiting for Godot,” covering penny stocks that hardly trade (and when they do, they trade in pennies per share) because they have nothing that a promoter, or speculator, would be interested in; “Criminal Incompetents,” for penny stocks that are promoted by garden-variety con men; the atypical “Minor Achievement,” for penny stocks of companies that are thriving small businesses with big dreams but not much growth potential; “The Good Try,” which is a company that does not become established as a money-maker but makes most of the right moves to becoming a growth company with real earnings; “Rampaging Bull’s Company,” which has serious potential to be a major promotion but little hope of becoming a thriving company; “Successful Entrepreneur,” a penny-stock company that does make the transition to one with revenues and earnings; and, the author’s Holy Grail, the “Warriorpreneur,” who has the ability to turn a promising penny stock into a major growth company.

The central lesson in this book, rubbed in frequently, is that the trader who doesn’t know what (s)he doesn’t know is hapless, and concomitantly easily suckered. The relevant needed knowledge is found in a psychological profile of the promoter, who occupies a gray area between a booster and a con man. Mr. Tadich fingers the promoter gone wrong as a “malignant narcissist,” as defined by the symptoms for Narcissistic Personality Disorder. Knowing how malignant narcissists tick is the major stumbling block between penny-stock-speculator haplessness and speculator competence. Only when this crucial entry barrier has been overcome can the relevant data be interpreted properly.

Mr. Tadich’s own psychological profile of the malignant narcissist in business has five facets: “Fearful and Greedy,” resulting in a person who can tap into others’ fear and greed; “Angry Rage,” which keeps subordinates fearful; “Vain and Critical,” with the notable exception of any self-criticism; “Courageous and Blunt,” as well as psychologically perceptive; a “Deepest Need” conflict between the need to be feared and the need to be loved. These character flaws add up to a character who, no matter how hard (s)he tries, can never rise above short-term opportunism. (In this context, “short term” means downright impulsive.)

Mr. Tadich knows full well that this personality pattern is far from being confined to out-of-the-way speculative companies. On pp. 85-6, he supplies a checklist of corporate symptoms that emerge when a Rampaging Bull heads up a senior company:

- top executive salaries that are 100-500 times that of the average worker in that company;
- “deep plush carpets in executive offices;”
- low-level employees battling for even minimum salary increases;
- if unionized, bad labor relations prompted by managerial arrogance;
- suspiciously high turnover of innovative employees;
- a control structure that forces innovators into servants’ quarters;
- product lines quietly rusting away;
- “strange diversifications that contradict the company’s philosophy;”
- a corporate culture of fear and not of excitement;
- overly formalized communication between managerial ranks;
- “irrational decisions and strange changes in company direction;”
- “recruitment of overly ambitious and/or violence-prone managers;”
- a public-relations policy of ingratiation. followed by either taking for granted or outright abuse for a group that is in the fold;
- a cultish practice of systemic mendaciousness to outsiders;
- “virulent anti-union attitudes;”
- “over emphasis on secrecy and security;”
- a gulf profound between management and staff.

If you’re interested, the snippet from this book that most closely matches Hollinger International, as described by the Special Committee report, is from the end of the section on “Minor Achievement” companies, provided that “earnings” are substituted for “revenues.” To wit, from p. 71:

“You should not invest in a public company whose revenues are steady, small, and only cover salaries for top managers. The share price will not increase soon. This company exists for the sole purpose of providing an easy living for its managers. If you look closely, you’ll be amazed at how common these companies are.”

As a trivia note, global warming intrudes in the B.H. Beane story, on pp. 155-7. Not bad for a book first published in 1992.

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There are two Websites that show a deep understanding of Narcissistic Peronality Disorder, and are both well worth going through carefully:

1. An outsider's view of the disorder by Joanna Ashmun, which contains the insight that NPD sufferes act like normal six-year-olds;
2. An insider's view by Sam Vaknin, Ph.D., which contains the crucial concept of the "false self," one that has to be continually reinforced by further intake of "narcissistic supply," to which the NPD sufferer is beholden.