Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
INTEL Bargain Teck Stocks Trading at 15.5% Discount Sale - 7th Dec 21
US Bonds Yield Curve is not currently an inflationist’s friend - 7th Dec 21
Omicron COVID Variant-Possible Strong Stock Market INDU & TRAN Rally - 7th Dec 21
The New Tech That Could Take Tesla To $2 Trillion - 7th Dec 21
S&P 500 – Is a 5% Correction Enough? - 6th Dec 21
Global Stock Markets It’s Do-Or-Die Time - 6th Dec 21
Hawks Triumph, Doves Lose, Gold Bulls Cry! - 6th Dec 21
How Stock Investors Can Cash in on President Biden’s new Climate Plan - 6th Dec 21
The Lithium Tech That Could Send The EV Boom Into Overdrive - 6th Dec 21
How Stagflation Effects Stocks - 5th Dec 21
Bitcoin FLASH CRASH! Cryptos Blood Bath as Exchanges Run Stops, An Early Christmas Present for Some? - 5th Dec 21
TESCO Pre Omicron Panic Christmas Decorations Festive Shop 2021 - 5th Dec 21
Dow Stock Market Trend Forecast Into Mid 2022 - 4th Dec 21
INVESTING LESSON - Give your Portfolio Some Breathing Space - 4th Dec 21
Don’t Get Yourself Into a Bull Trap With Gold - 4th Dec 21
GOLD HAS LOTS OF POTENTIAL DOWNSIDE - 4th Dec 21
4 Tips To Help You Take Better Care Of Your Personal Finances- 4th Dec 21
What Is A Golden Cross Pattern In Trading? - 4th Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Watch Your Back on Wall Street, Seriously

Stock-Markets / Market Manipulation Aug 21, 2009 - 02:13 AM GMT

By: DailyWealth

Stock-Markets

Best Financial Markets Analysis ArticleDr. Steve Sjuggerud writes: I remember my first time "getting used" by Wall Street... It was for 500 bucks. But I was disgusted by it. It was in my own firm!

Here's the story...


I was a broker, probably 21 years old (I started college at 16). Our company had gone public a few months before. Dr. Glenn, one of my good customers, wanted to buy our company's stock, at a good price if I could get it.

Over the loudspeaker one day, our head trader (the guy who buys and sells stock all day) said, "1,000 shares of our stock at the bid, first one to call me gets it."

This sounded perfect for Dr. Glenn... If the stock normally traded at $10, I could now get it for $9.50! I called him right away and told him about this. He took my word.

I called the head trader and was happy to get the shares at $9.50.

Then, a terrible thing happened... The bid on the stock fell to $9. What was going on? I'd just bought for $9.50. My customer was down instantly, and now I looked really bad to him.

In short, my firm's head trader sold me down the river and basically cheated Dr. Glenn – a customer of our own firm – for a measly $500. He had a bunch of shares of company stock to dump... and he found a sucker in me.

I really couldn't believe it. The head trader didn't do anything illegal. It was just dirty.

I felt bad. I should have been smarter about it for my client. I was young and gullible... I didn't think people would be that dirty, especially at my own firm, sitting 30 feet away from me.

But there was nothing I could do. There was nobody to complain to... nobody would have cared. The brutal reality was that the head trader made much bigger profits for the firm than I did as a young broker. I was disposable. He was not. He'd done nothing illegal – he just found a sucker.

I was reminded of this story on a trip to New York this week. I met several Wall Streeters who – after hearing I simply work for my subscribers and don't take kickbacks for anything – had a hard time grasping the idea.

Yesterday, during meetings in New York, successful investors told Porter Stansberry and me over and over again, "We really like you guys and your ideas... you don't seem to have any conflicts of interests... you write what you think."

It is a simple business idea... you like our ideas, you keep subscribing.

But maybe we shouldn't have taken so much pride... Maybe the "honest buck" thing – the lack of any conflicts of interest – is what makes our writing and our ideas particularly attractive. Because on Wall Street, you never know if a guy is telling you the whole truth or if he's simply looking out for his own pocket. It's just the way business is done there.

I'm sure the head trader at my old firm did what he did to me without thinking about it... without losing a moment's sleep. His business was "taking" people. But nearly two decades later, that trade still sticks with me. I still feel bad for Dr. Glenn. (Dr. Glenn, by the way, became a subscriber of ours, and I've bumped into him at our conferences. Thanks, Doc, for sticking with me.)

The "moral" of the story is this: When it comes to investing, you have to question the motives of the seller of the investment. Always.

If you think it's rude to ask a salesperson how he gets paid, well, get over it. Ask him. He will tell you. It's not a secret.

It's fine for him to make a good living... you're concerned about his incentives... his motives. Ask as much as you can. Heck, by simply asking questions, he'll take note of your interest and make an extra effort to recommend the things you want.

If it's a mutual fund you're buying, ask why you should buy one over another that does the same thing but with lower fees. If it's an investment newsletter, read the fine print... because the newsletter publisher must disclose if they're being paid by a company to write up that company's stock.

While you can't control an investment's performance, you can control your fees... so ask the questions.

When it comes to your investments, you must watch your own back... because nobody else will.

Good investing,

Steve


http://www.dailywealth.com

The DailyWealth Investment Philosophy: In a nutshell, my investment philosophy is this: Buy things of extraordinary value at a time when nobody else wants them. Then sell when people are willing to pay any price. You see, at DailyWealth, we believe most investors take way too much risk. Our mission is to show you how to avoid risky investments, and how to avoid what the average investor is doing. I believe that you can make a lot of money – and do it safely – by simply doing the opposite of what is most popular.

Customer Service: 1-888-261-2693 – Copyright 2009 Stansberry & Associates Investment Research. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This e-letter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Stansberry & Associates Investment Research, LLC. 1217 Saint Paul Street, Baltimore MD 21202

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Daily Wealth Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in