Wednesday, December 10, 2008

Financial Pornography

Most people find pornography offensive! That has been true for the past few thousand years of course. That is why it is so confusing as to how so much of it survives, even though nobody buys it or watches it.

Financial pornography is the same, but with charts instead of pictures! In both cases the reality is not nearly as stimulating as the "doctored" graphics try to portray.

Financial pornography is represented by the distortions, misrepresentations, phony fund commercials, stupid bank claims, and all the other obviously bogus claims being delivered by phony senior citizens claiming to be retiring to France when they are actually working into their late 70's because they bought the stupid mutual funds they are flogging.

Nobody would ever listen to "Mad Money" nor follow the crazy advice, yet I keep hearing people talk about what they heard from a "friend" who watched the show. Stop watching that stuff, its morally and financially corrupt.

The financial markets have always had a way with words and graphs. In the past, it was all rather innocent since "good" people were not exposed to the financial smut. Then along came the Internet, cable T.V., thousands of financial planners and ,yes , blogs! Now the financial world has gone nuts and products that were once in the restricted world of professionals are now discussed by Joe Trader as if he actually understood them!

Since when did:

- retirees read 80 page legalese on a split-share issue and understand the leveraging (hint: the answer is never),

-when did your local lawn care guy start trading in options because a "covered call" is free money.

-I heard a caller on Business News Network today who claimed he never lost money on a single option trade and could not understand why everyone was not writing puts and calls.

Well enough of this smut! Here is the truth you need to listen to and learn from!

Day traders live in their mothers basement and are really just degenerate gamblers.

Active trading by an investor works only when the average investor is Warren Buffett and has billions to cover his mistakes....and yes, he does make mistakes. Active trading without a billion dollar corporate team behind you is just stupid....yes, I mean you!

Managed or structured products are a fee looking for someone to pay it. The only way to win is to be the salesperson skimming the investments! Yes, mutual funds are a managed product so figure it out.

Wraps are the way small time investors get exposure to fully diversified fees. You pay everybody in good times and bad. You make benchmark returns almost never. Duh!

Financial Planners do not often do financial planning. They get the qualification because the title "Mutual Fund Fee Skimmer" was too difficult to fit on their cards. They are paid to collect your money and deliver it to big corporations. They do not manage your money, they collect "vig" on the deposits.

Bankers are like a stealthy thief sneaking into your house and stealing the silverware one piece at a time. Before you know it your eating with your fingers and the bank is offering you a cutlery loan at 18% interest. Service charges on proprietary funds are obnoxiously high and the people selling the funds are proof that the bottom of the class can still find work somewhere.
Stop feeding the beast and thinking the teller is your friend. friends don't refer friends to bank planners.

There, now I feel better.

I hope that I have offended a few bankers, advisors, and planners because that way I feel like there is a purpose to life. If you are ready to handle the ugly truth, wait for 2009 when the real stuff starts to fly and markets test 7,000 and lower!

Then the real smut will come to the fore!

See you in 2009!

Tired of 2008.....sois mike


Shane said...

Talk about a rant... With all of this advice on what not to do, might you have some advice to dispense on the topic of what we CAN do to stave off the financial rape and pillage of our savings?

Anonymous said...

exactly what Shane said

sois mike said...

Coming up in the anti-rant shortly!

Shane said...

Thanks Mike, your Anti-rant hit the nail on the head.