Its dinnertime and the phone rings. It's Joe Noname with SuchNSuch Investment Company and has he got a deal for you.
Joe wants to be friendly and engage you in a few not-too-personal questions just to break the ice before he gets into his too-good-too-be-true pitch. Stock, oil, Internet, telecommunications, you name it.
Joe tells you about his company's credentials and how they are "affiliated" with some big New York bank or investment house - a name that everyone knows and trusts. And Joe also wants you to know how experienced he is and he came from a big, well-known brokerage house because this deal was too good to pass up and he wanted everyone to know about it. He has even bought shares in it himself. And pigs can fly!
He carefully mixes truth with unsubstantiated material, which appears to be fact. His company is registered (probably true) and approved by the Securities and Exchange Commission (lie, they don't approve of any company) and is affiliated with AT&T or Bill Gates (a lie, but very hard to check out). He interweaves little lies and big ones so it all sounds credible.
This investment is so good it is underwritten by the big brokerage house Morgan Stanley and guaranteed by MCI or some other big name. Furthermore, we guarantee your investment because you are paid first before any dividends are paid to any other shareholder. This is a "no-risk" investment. The last time our company had one of the high quality investments all the investors made 500% on their money in less than 18 months. Isn't that great! I wish I had some of the first offering; I'd be rich now. Joe will probably quote you some stock offering like Yahoo or Intel that did make this kind of return or even more, but you can be assured this company had nothing to do with it.
"Mr. Mushroom, don't miss out on this as there are only a limited number of shares my company is allowing me to offer. How much cash do you have you would like to make 500% on at this time? $5,000. I'll tell you what I'll do, I'll reserve a thousand shares for you and give you the option to pick up another 10,000 shares any time in the next 30 days provided you can wire in the first $5,000 immediately." Be careful of any offer where they must have the cash now, immediately, before yesterday. Or Joe is going to send you papers via FedX and you must return them immediately. And always kiss your money goodbye before you send it because that is the last time you will ever see it.
Ask for their address. If it is a P.O. box you know it is a scam. Whatever he tells you make sure it is not one of those mailbox businesses. Joe is either in a boiler room or calling you from home. Get his office phone number and home number. Ask him where he got your name.
In a nutshell here is what you want to listen for: The return is illogical (too good), his credentials are uncheckable, the names he drops are almost impossible to verify, it is a "no-risk" deal, they won't give you time to check them out (FedX) and you really don't know where they are located.
When Joe Noname calls I am polite and firm and just, very quickly, even before he gets into his pitch, say, "Thanks for the call, Joe, but I'm not interested" and I immediately hang up. Joe prefers this also because now he can go on to the next sucker.
Please, don't ever send money to a voice on the phone.
Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.
1-888-345-7870; http://www.mutualfundmagic.com
I often hear from people, "I don't trade. I invest.... Read More
Every Wall Street analyst, financial planner and broker will tell... Read More
For the last few weeks we have seen the stock... Read More
When you become interested in a stock or mutual fund... Read More
Have you seen all those big full page ads for... Read More
I would like to share with the reader an article... Read More
One of the basic laws of physics is that a... Read More
The fight continues to rage among traders who use technical... Read More
All of the talking heads have been telling us that... Read More
I have a 2-car garage. There are nice shelves on... Read More
How often have you come across an advertisement or e-mail... Read More
Just about everything you have been told about Social Security... Read More
Economists know more about how the fragments of society work... Read More
During our travel down life's path we come to many... Read More
There is no question that the stock market is being... Read More
Success in small cap & micro cap stock trading like... Read More
Carefully thinking through your goal as a trader is of... Read More
When an individual investor wants to roll up his sleeves... Read More
When it comes to stock market trading it PAYS to... Read More
This is an extract of an article which was first... Read More
"If you don't know where you are going, any road... Read More
It has often been said that there is only two... Read More
The Shadow knows. Remember him? It seems a shadow has... Read More
I know there are a lot of you out there... Read More
This is the continuing story of our two imaginary traders,... Read More
Breese limo service at o'hare ..Everything you invest in has risk so you want to... Read More
I have watched my cat play with a bag of... Read More
It looks like we have now entered a new bull... Read More
Sometime around 1980, can't remember exactly, there was a flight... Read More
As a novice trader, you'll often feel the need to... Read More
I made my very first investment in the stock market... Read More
"Buy and hold" is one of the most heralded investment... Read More
I cringe every time I hear a novice investor tell... Read More
Many people would like to diversify their portfolios to expand... Read More
Are you one of those many people who dread reading... Read More
Buy high and sell low -- It's not a typo.Millions... Read More
One of the great "secrets" of successful people is discipline... Read More
Mutual funds were created with the idea that one person... Read More
Two weeks ago I wrote about what the Securities and... Read More
One of the main reasons many of us get into... Read More
At some time in your life you have been on... Read More
I feel that an investment strategy in the stock market... Read More
It is difficult to make money in a bull market,... Read More
One of the great "secrets" of successful people is discipline... Read More
Reach in your pocket and take out that big roll... Read More
For the year 2000 we have seen hundreds of mutual... Read More
A Guide to Using Stop Loss Orders Stop losses are... Read More
Suppose your position has made a big move and you... Read More
When an individual investor wants to roll up his sleeves... Read More
We need a rabbit!This was a pretty horrible week for... Read More
Stocks & Mutual Fund |