For best operation, run the ground wire from the regulator body all the way back to the generator housing. Most generators have a threaded hole in the housing for a ground screw. If it's not there, use one of the through-bolts that holds the housing together and attach a ground wire with a ring terminal under the head of one of those bolts. The regulator provides the ground for the field coil circuit, and I've fixed dozens of erratic charging systems by simply giving the regulator and the generator a common grounding wire.
Jerry

"It is better to be silent and be thought a fool than to speak and eliminate all doubt!" - Abraham Lincoln
Cringe and wail in fear, Eloi- - - - -we Morlocks are on the hunt!
There is nothing noble in being superior to your fellow man; true nobility is being superior to your former self. - Ernest Hemingway
Love your enemies and drive 'em nuts!