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Three Confessions of a Financial Scammer |
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-- By
Anthony Haddad |
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Want to know how to keep
your money safe from scammers? One scammer reveals
some of his best tricks. (Full
Story Below) |
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Also in Today's
Issue... |
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With
Obama as President, Wind-Power Investors Are Seeing
the Green |
Obama wants to double clean-energy generation over the next 3
years. His stimulus plan includes $104 billion for
alternative-energy technologies. That spells enormous opportunity
for early investors -- because whenever Washington helps a new
industry get off the ground, the investment profits follow in
lockstep.
We saw it happen in biotechnology, nanotechnology and the
Internet. If you missed out on these government-fueled bonanzas of
the 1990s, don't feel bad... an instant replay is straight ahead.
Get the story here. |
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One
Great Stock Every Month -- No Matter What the Market
Does
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It's the simplest way to make money in
today's market -- focus on one investing idea every month that's
tailored to make you money in today's market. That's exactly
what Stock of the Month does. It brings you one great pick
every month, carefully chosen by maverick stock picker Amy Calistri.
As Amy says, one good idea at the right time can save your portfolio
in a tricky market like this one. Amy shared this, and some of her
other thoughts on investing, in a new video just for you.
Go
Here to Watch it Now |
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Three Confessions of a Financial Scammer
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I know financial scammers. I've met them.
I've been to their offices, even their homes. Before I met a
scammer, I thought they'd be pushy thugs. But they're not.
They pick up the tab, are interesting, and seem like some of
the most genuine people I've ever met. All around, nice
people... except that they're trying to rip you off.
One of the most interesting stock scammers I
ever met, let's call him J, ran an "investment bank."
Bernie Madoff is a lot like the J, albeit more successful
(until recently). Nice suit, big watch, Bentley, the
works...
I went to interview J a few years back for
a story on short sellers since the SEC was, at the time,
considering new rules. Cold calling local investment houses,
J was quick to invite me over. "Yeah sure. Come by today
after the market closes," he told me and then hung up the
phone.
J's office was in a building that was right
across the street from a municipal airport in Orange County,
California. His office had no sign on the door, making it
very difficult to find -- which was probably the point.
For reasons I still don't quite understand,
the conversation quickly turned from short selling into a
how-to lecture on scamming. Here are some of his most useful
bits of advice:
1) "If someone thinks you're buddies
with the CFO or have a guy in the White House, you can make
them believe anything."
The allure of insider information is strong.
Imagine how well you'd be able to position your portfolio if
you knew the results of some company's next earnings report
before the Street did. You'd make a killing.
But like most scammers, J didn't know many
CFOs. He probably didn't know anyone in the White House
either. And
he certainly didn't have anyone telling him what was going
in these reports. But that didn't stop him from using it to
woo people into giving him their money.
If you think about it, the chances of anyone
passing along secret intel is quite slim. Why would anyone
in a position of authority risk it all for a couple bucks?
Chances are, they wouldn't.
2) "If you offer somebody big, steady
gains and show them an example or two of how you did it
before, they're yours."
This is Bernie Madoff 101. A scammer shows
you a statement of solid, hefty gains. You believe the piece
of paper that he printed at home is a legitimate document.
(Even if it is a real piece of paper, it could be that he
has 67 brokerage accounts -- J, I found out later, held at
least 20.)
People get trapped by this because they feel
like they'd be foolish to turn it down. Except for brief
periods of good luck (or bad), when we open up our
investment statements, there's not much action. So upon
seeing someone with such a strong performance record, we're
easily duped.
3) "If you can convince someone that you're
using a system invented at a private bank in Zurich that some
big wig uses -- the Saudis, the Bushes, the Russian Mob,
whatever -- you've got them."
Nearly everyone is a little conspiratorial,
and this type of story tries to prey on that. These people
have gazillions of dollars, and they wouldn't trust their
money to just anyone -- right? Now you can take advantage of
that, too, with your piddly little nest egg -- or be
suckered out of every last penny.
The Saudis, the Bushes, and the Russian Mob
may well have some money in Switzerland. They might even
have some hotshot team on it. But J didn't know anything
about it. It was a complete scam.
In total, we spoke for about an hour, and
only about two minutes of that was useful to me, spent
talking about short sellers. The next day, I called J to
ask him some follow up questions.
"Short Sellers?" J asked. "Who cares?"
"Do they matter to you at all?" I asked. "Do
they affect your business?"
"Market goes up. I make money. Market goes
down. I make money. I don't care one bit about short
sellers."
Maybe it was because he wasn't really in the
investment business at all.
-- Anthony Haddad
Staff Writer
StreetAuthority Investor Update
P.S.
For every "Scammer J" that I talk to, I also come across
talented and honest individuals who can help you make
high-quality investment decisions.
No doubt you've already heard about one of these
people. Her name's Amy Calistri, and I'm proud to say that
her office is right next to mine here in Austin, Texas.
Amy's so good at picking stocks that our boss encouraged her
to share her favorite picks with you every single month. Go
here to get to know Amy and see what I'm talking about.
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Worth Noting
According to the head of its State Administration
of Foreign Exchange, China has increased its gold reserves by
more than 75% in the past five years.
That means that china is now holding more than
1,000 tons (32 million ounces or about $30 billion) of gold.
--
Bloomberg
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Who Cares if We're at a Bottom When You're
Pulling in $32,830 a Year in Dividends?
With the safe, growing, high-yield picks
that Editor Carla Pasternak recommends every month you don't have to
worry whether or not the market has bottomed. You can sit back and
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$32,830! You can't go wrong looking into Carla's recommendations. A year from now,
when you've collected as much as $32,830 from dividends alone you'll be glad
you did.
So take the first step and
read this
report now |
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