November 7, 2006

Mr. Joe Borg

Alabama Securities Commission

770 Washington Ave. Suite 570

Montgomery, Al 36102

RE: NASD Schapiro commentary

Dear Mr. Borg,

As stated, here is the letter to Schapiro. The commentary is not too dissimilar in issues to that which I have addressed to you previously. However, the speech she made is disingenuous at best- she does not know what the fundamentals of investing are- clear by the fact that the NASD has never required anyone to know them. My accusations are valid as well as the breach of basic fiduciary duty by the players in the system.

I repeat, if you do not know diversification by the numbers, you cannot get to risk. If you cannot get to risk, you cannot get to suitability. Effectively every financial and investment plan is knowingly wrong- yet they pass muster by all- SEC, NASD, AARP, NAPFA, NASAA, and on and on. Why? Because the knowledge base is so poor. Brokers never have been required to know the fundamentals of investing. Attorneys have nothing in their education or training to substantiate any understanding of investment suitability at all.

And I just read today that the NASD is paying $345,000 to Better Investing to come up with education. Oh really? They do not know diversification. They do not know risk. If you know the fundamentals, you can see the problem directly on their web site. They show a bunch of buy/sell ratios on stock. But without the fiduciary caveat on diversification and risk, that is fraud and a breach of duty to any of its members. (Consumers would need to buy at least 50 stocks to be diversified to the same level of risk as the market. But, then again, the holding of equities over time only increases the risk of loss (and equally the gain of large sums) But it is the ability to sustain oneself over a difficult period that is the concern.) Unfortunately, and as detailed repeatedly, clueless educators lead to clueless industry practitioners that are interviewed by clueless journalists and inevitably lead to clueless consumers who will be savaged by yet another 1973/1974 or 2000/2003. If the NASAA is really interested in developing true education, it must force the essence of the fundamentals of investing whether anyone likes the truth or not. There must be an understanding of risk

Enclosed are a couple newsletters. Note correlation on Page 6. It's too much, obviously, for the average consumer, but brokers are essentially clueless to its implications since they are not taught any of this at all. Fact is, it is not even mentioned in any licensing material.

Very Truly