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Brain Snappers and Other Wall
Street Nonsense
by Al Thomas
The last time you spoke with your broker did he
use any of the following words? Diversification,
Price-to-earnings ratios, discretionary trading,
lifting a leg (he’s talking to you not your
dog), leverage, divergence, fee-based compensation,
escalator clause, tactical asset allocation and
other mesmerizing words to place you in stupefying
shock.
Brokers do that to let you know that you don’t
know anything about the market and you must allow
them to make decisions for you. You don’t know
the language. You are just too dumb. Another mushroom.
Wadda ya’ mean mushroom? Didn’t you know?
Most customers are considered mushrooms. A mushroom
is grown in the dark and fed horse manure. Now you
understand why they treat you that way.
Then try to get him to explain commission structures
of mutual funds. Oh, you’re not allowed to
ask that. You might want to read page 35 in the
January 31, 2005 issue of Newsweek magazine for
an excellent breakdown of this Wall Street scam.
Maybe you better not. You will get mad at your broker.
Another one of those big words they don’t want
to discuss is redemption fees. This is an extra
charge of as much as 2% of the amount that is deducted
from your check if you sell within a certain period
of time. Brokerage companies tell you it is to discourage
frequent short-term trading which adds to their
cost of doing business and increases the expenses
that are charged to you every year. Having owned
a brokerage company I can tell you this is more
of that brown stuff they feed to the mushrooms.
The reason for redemption fees is to discourage
you from selling. You might take money out of your
account and that must be restricted in every way
possible.
Some of the biggest words are associated with those
special limited partnerships. These are definitely
brain twisters. You can get these in real estate,
hospital construction, oil and gas pipe lines and
the most confusing one of all is technology. And
they are all guaranteed. That word I understand,
but be sure you read the fine print to see what
is guaranteed. You remember the old one that they
give it to you in the big print and take it away
in the fine print.
How about placing a limit bid on a secondary distribution
of a special claim on residual equity certificates?
You didn’t understand that? Believe me you
don’t want to.
When you are solicited by your broker, financial
planner or anyone to buy any equity you must clearly
understand what you are buying.
About The Author
If you don’t understand it don’t buy it.
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 www.mutualfundmagic.com
and discover why he's the man that Wall Street does
not want you to know.
Copyright 2004
al@mutualfundmagic.com |
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