Alessio Rastani, 34, an independent London-based stock market-forex trader and professional speaker, became a worldwide phenomenon immediately following his appearance on BBC News. Unlike many fellow traders, he is not FSA-registered and does not have an academic background in economics or mathematics. “My parents wanted me to study dentistry” Alessio explains. “However, I quit dentistry soon after. I absolutely hated it. Then I moved into law and graduated at University of Wales. However, once I graduated, I did not want to work full time as a lawyer. Around the same time I started trading on the stock market. Those were the years of the dot-com bubble and I lost a lot of money gambling on stocks. Then I asked myself a simple question: why did I lose so much money?”. Mr Rastani understood he needed to learn the basics and spent time working with senior traders to gain experience. “I wanted to be a trader; however, I never dreamt about working for a leading investment bank because I wanted to run my own desk and retain independence”.
Italoeuropeo contacted Mr Rastani to gather his thoughts on the current financial crisis.
Q: Last September you were invited by BBC News to comment on the Eurozone crisis. Did you expect to become such a “hit”?
A: I absolutely did not expect to gain so much attention. I thought: who’s going watch an unknown trader on BBC at 11am? As I finished the interview I was about to call the BBC to request a copy of the recording. By the time I arrived home the video was already on YouTube and Facebook. It was everywhere. It went viral. I didn’t expect it. That was the first time ever I went live on BBC. A few days earlier I did a piece on BBC radio and the producers liked the idea to have me on live TV.
Q: Why did accept BBC’s offer to go live on TV? What message did you want to convey to the public?
A: It’s always good to be asked so I didn’t mind it at all. They wanted to hear my opinions so I told myself: why not? I just wanted to convey a message that was going to be different. I was sick and tired to hear things like “we are in a bad economy” or “let’s moan about it” and so on. I just wanted to take a different approach and tell people that bad times are great for investing. Just don’t sit down and do nothing. Act now. There are genuine opportunities to make money out there.
Q: In your controversial BBC interview you claimed that “governments don’t rule the world, Goldman Sachs rules the world”.
A: Here’s a question for you. Do you think that US Presidents like George W. Bush or Obama are running countries?
Q: Not for a single moment! George W. Bush and Barack Obama have many connections in the energy sector and in banking. Surely they are not in charge. Their fund-raisers are.
A: Exactly. They are not the people in charge. All the leading Republicans and Democrats are answering to the financial corporations. Here’re some examples. Tim Geithner, the US Treasury Secretary, was a lobbyist for a leading financial institution. He now works in the White House. Henry Paulson was Goldman Sachs’ former CEO. He was Geithner’s predecessor and the architect of bailouts. He shovelled a lot of money into the banks via the so-called stimulus acts. According to The Washington Examiner, the biggest contributor to Obama’s 2008 presidential campaign was Goldman Sachs. If you look at history, you’ll find that banks have always played a big part in influencing policies and regulations. Just to give you another example, the Federal Reserve was put together by the bankers. J.P. Morgan, Rockefeller and many more deliberately produced a crisis in the late 1910s and persuaded the then US President that the country needed a central bank. More recently, in 1971 Nixon abandoned the gold standard when he ended the Bretton Woods accord. As long as we stay with fiat money we are going to be enslaved to the banks. We’re tied-up in debt and that’s how they control the governments.
Q: On Bbc News you said: “I go to bed every night dreaming about a new recession”. How would the major financial institutions benefit from a depressed economy? Is there a hidden agenda to overthrow Europe’s economic elites?
A: Financial institutions like Goldman Sachs want Europe to become weaker because the weaker Europe becomes, the more countries they can add to their portfolios. Look at what happened in the early 20th century. The big banks caused a market-wide panic. The markets crashed and the likes of J.P. Morgan and Rockefeller were able to acquire assets at bargain prices. They cheated by causing a meltdown and profited from it. The same thing is happening today. They want a weaker Europe so that they may lay their hands on assets and profitable business units. If there is a masterplan, this is it.
Q: Many business insiders think that we may need a new war to kick-start the economy. What’s your view on the subject?
A: A new war won’t solve the underlying problems. However, I noticed that previous wars have boosted stock markets. Every time there is a war in the Middle East stocks go up. A war is possible and the current US administration is so scared of losing the next election that they may deliberately start a war to try to stay in office and distract people from the main issues on the economy.
Q: What’s next for Europe?
I do not think the Eurozone is going to collapse any time soon. I expect the ECB to start printing currency over the coming months.
Q: Let’s talk about Britain. Tobin tax, Vickers proposals and Basel 3 are perceived as threats. The big investment banks may move away from the Square Mile and relocate to countries where laws are more lax. In your view, what’s next for Great Britain?
A: I do not agree with idea of increasing taxes and regulations. I believe in economic freedom. You need rules to avoid costly mistakes but, at the same time, you do not need stricter regulations. You may not wish to constrain the pattern of recovery by over-regulating the financial sectors. With reference to Vickers proposals and Basel 3, I agree with you. In the long term money is going to flow to countries where taxes and capital requirements are lower.
Q: We’re going through a bad economy. What is your advice for small investors?
A: Avoid “buy & hold” strategies. People in general only know a “buy & hold” strategy. Financial advisors and fund managers keep on telling clients to invest in their funds and hold positions. Anyone who believes that is insane. Here’s a good example why I think a “buy & hold” strategy doesn’t work in the long term. If you bought gold in 1980 and sold it now, you would have made virtually no profit at all. In 1980 gold traded at $1600 an ounce. Today it is trading at $1655.
Q: More generally, when you adjust historic stock or commodity values for inflation, you’ll see that, actually, in real money terms you may not necessarily be making a profit at all.
A: That’s right. That tells you that buying stocks and commodities and holding positions in the long term may not pay out at all. Buying and selling is the way forward.
Q: What should we do then?
A: Well, the real piece of advice is: invest in your knowledge and in yourself, not in stocks. Here’re some simple rules. Rule number one: do not trust anybody with your money because other banks and financial advisors share with you the same goal: making a profit. Rule number two: trust yourself. Before you commit to anything ensure you make informed decisions and learn the basic techniques. Pick-up a book, take part to online seminars. Don’t simply put money into a bank account. As you correctly pointed out, inflation is going to erode your capital sooner than later. Bad economies are great if you know what to do, if you are an informed investor. This is the point I want to get across on my website and at my seminars.
Q: What is going to happen to the stock markets over the next few weeks?
A: The stock markets are going to get extremely volatile towards the end of January and over the next month or so. In the US, for instance, we are getting very close to the previous highs. The markets will gather more volatility and we will see a downward correction. It’ll be interesting to watch.
Q: Any plans for the future?
A: There are a few things coming up. I have been asked for a few documentaries and I am working on a book on trading techniques.
Alessio Rastani will host a free online seminar on Thursday 26 January. More details are available onhttp://www.leadingtrader.com/.
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