is more true because it
St. Augustine, Confessions
goes before destruction,
a haughty spirit before a
was the kind of guy that,
you looked at him, you
never have thought
was a bank robber."
Chief Teller Homer Edgeworth
of the Citizens State Bank in
Tupelo, Mississippi, describing
Machine Gun Kelly
is more true because it is elegant." Saint
Augustine’s words are as relevant today as they
were 16 centuries ago. Your broker is persuasive.
He is friendly, personable, funny, knowledgeable,
considerate, successful, charismatic, and interested
in your family. He is the kind of guy you’d like
to hang around with outside the office. Of course
he is. He’s a salesman. He has received advanced
sales training from his employers. He has been
trained specifically in how to sell you on whatever
his firm wants you to buy. And, his firm wants
to sell you whatever products are most profitable
to the firm. Your broker is good at it because
his livelihood depends on it. His manager is grading
him on how well he sells you what his firm wants
to sell you. His manager gets a cut of whatever
he sells you. That is why his manager, who doesn’t
even know you, is pushing him to sell you products
that bring in more money to the firm. That is
not to say that he is not genuinely what we’d
consider a “good guy.” If he is, though, he is
a good guy who regularly has to choose between
what is good for you and what is good for himself.
Investor’s Watchdog’s founder,
in his time at the SEC, saw all manner of investors
fall victim to fraudulent or negligent brokers.
Accountants, Actors, Astronauts, Business Owners,
Doctors, Engineers, Entrepreneurs, Factory Workers,
Lawyers, Mechanics, Ph.D.’s, Retirees, and Scientists.
They all had two things in common. First, they
trusted the salesman based upon his presentation
or a referral from a friend, with no independent
verification of his claims or his credentials.
Second, they believed that they were too smart
to be taken in by a salesman.
Believing that, because you are
smart, you can discern every essential fact
from a presentation carefully designed to hide
some of them, delivered by a person specially
trained to gain your trust, is like believing
you can hit a major league fastball because
you are a baseball fan.
You need a specialist. Investor’s
Watchdog is that specialist.