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Thursday, 15 September 2016

Investment letters used as tools for fraud



Its not about being cynical.

It has everything to do with financial literacy.

Imagine how it would look if you go round helping your financially "illiterate" friends and family members; only to find yourself a victim of a fraud...






Yes, there's nothing passive in verifying which investment newsletters are genuine, which are fraudulent in nature.


The ability to parrot the exact Investopedia definitions of financial terms does not make one "financially literate".

Can you figure out the reasons why people behave the way they do:

1)  Hedge fund managers go on public media to share their investing thesis;

2)  financial bloggers revealing their recent buys and sales;

3)  sell side analysts plugging certain stocks of the month;

4)  financial educators (who are not financially free themselves) ever so eager to help you achieve yours?


How to read people better?

Do they teach this in school?

Why yes!

Still remember your literature and history classes?

Oh yes! Watching Game of Thrones definitely counts!!!


Show me one successful and super rich business owner who doesn't understand human nature. Wink.






16 comments:

  1. Hi SMOL,

    Don't mind me sharing random thoughts. If I were to read literature to improve my EQ skills/better understand human nature, what if the author is equally nerdy/socially awkward/no EQ? Then won't that mean I'll viewing the world through the same lens again? Haiz

    ReplyDelete
    Replies
    1. Unintelligent Nerd,

      Unless you are a "monkey see; monkey do person", how would reading a book from a low EQ author affect you?

      If we are aware of human nature, we would try to find out the context and perspective why the author said what he said.

      For eg, if a financial blogger swears by REITs and have nothing good to say about brick and mortar physical properties - and through verification you find out he's fresh out from NS and is still an undergraduate - would you discount what he says?

      Of course its easier to buy 100 shares of a REIT; and you can't buy a few bricks of a property at a time ;)


      If a person is easily swayed by what others say, and don't have a mind of his own, it would be best to stay home and don't bring your donkey to the market to sell ;)

      (The story of the man, his son, and his donkey)



      P.S. You could be mixing up introvert/extrovert personalities with EQ.

      A person can be an introvert with high EQ.

      There's a famous introvert financial blogger we all know. He just prefers to communicate via facebook, emails, and his blog.

      He has openly shared he prefers to keep to himself in real life; yet his followers in cyber space are "legion" - for they are many ;)

      Delete
  2. SMOL, I don't get what's so smart and what's so passive when one day a blog "newsletter" said bull dying and the next day said bear dying. Some more ask people to subscribe so you will first hand info on imaginary boy movement. I don't smell bull or bear, instead I smell snake oil more ;-).

    ReplyDelete
    Replies
    1. Yaruzi,

      Snake oil relies on human nature to have short term memory ;)

      Just make a call - never mind bull or bear.

      If right, see? I am godlike!

      If wrong, I got teach you all money management right? I've just saved you from a much bigger loss! No need to thank me...

      If market sideways, be patient! Need time to let the trade pan out.


      OK, 1, 2, 3 all together now - you win liao lor!

      Delete
  3. Hi SMOL,

    Totally agree. I always say humanities should come first before math and science. I am silly enough to think that fiction are really fiction and factual books are really factual. All are fictional because they have a story, but the fiction books at least didn't pretend it is a story based on some actual human experience!

    Since then, I've been reading fiction books all the way to make up for the 'lost years' lol

    There's a little persuasion tactic at work here - appeal by authority. It seems that if you've written a book (or an ebook) and you've a blog and had given courses, you're an expert. Well, the truth is far from it. I've been blogging for more than 10 yrs and I'm still a newbie. The difference is that I know I'm a newbie!

    ReplyDelete
    Replies
    1. LP,

      Some parents (and students themselves) may think reading outside the recommended textbooks are a waste of time - they don't translate to better academic scores.

      This behaviour is extended into adulthood where one does not read beyond books that expressly help us in climbing the corporate ladder or move towards financial freedom.

      Even reading must have a goal and objective?

      No reading for pleasure anyone?


      Your wide reading of fiction shows in your blog posts.

      That's why I was drawn towards your tavern ;)


      Many of the ebooks and investment/trading books published by our financial "educators" are mere amalgamation of what's already written by others.

      There is very little original thought.

      I'm already quite kind; others may call it plagiarism.

      Delete
    2. SMOL,

      Plagiarism, you say? I see it this way: To steal ideas from one person is plagiarism. To steal from many is research.

      I try not to plagiarize the lives of my parents, my peers, my teachers, my colleagues, and my fellow bloggers. I attempt to be the criminal of their rules. and create my own life.

      By the way my E-Book is coming out soon. I promise it is solely based on research. Lol

      Delete
    3. Andy,

      It's not plagiarism if we give credit to the sources of our research ;)

      That's why when you buy real physical books, there are footnotes and appendixes.

      The "standard of publishing" is higher as there's a publisher who vets the author as the reputation of the publishing house is also on the line...

      When it comes to E-book, well, its ownself write and ownself publish :)

      Ownself check ownself!?

      LOL!

      Delete
  4. Oh no,

    LP and SMOL,

    I very seldom read to climb Coporate ladders, too academic. I rather talk about experince. How u handle this situation in class, how did this pedagogy work out? I read to gain understanding of what people are talking about, u say TA, DI whatever, I roughly know what's is about, and of I dun know, I ask.

    I read more for fun, the only book h kept reading about teaching is "teaching like a parrot" where the author shares no numbers but experince and u can feel that passion oozing through...

    Hey, but I share my buys sell, I no snake oil ok! Don't brush all of us with the same stick. I have a small hole in my heart Sobz sobz. Pass me a toilet roll

    ReplyDelete
    Replies
    1. Strange thing started to happen in our minds when someone flashes large sum of money, showing flashy sport car; and standing in front of landed properties; we are immediately inspired and believe They Can We Can and fail to ask how true is it?

      Many are too blindly by Greed!

      Delete
    2. Sillyinvestor,

      Look at pageview stats for your posts. Those with a listed company as headline will attract more readers than personal musing posts right?

      With your track record, the smarter reader will probably fade your calls - you buy, they sell; you sell, they buy ;)

      And you don't collect emails to monetise later by giving out free e-books.

      No, you definitely not snake oil!

      A bit lost? Maybe ;)

      Delete
    3. CW,

      People have short memories; and maybe Singaporeans are a bit blue-eyed like the Scandinavians...

      Every few years, we'll read in the press charges and arrests for:

      1) Businesses that are scams (gold trading; land banking).

      2) Remisiers/dealers (churning; pump and dump).

      3) Financial educators (Dr Options; and that dude who operated a fund without a licence).


      I won't be surprised one day if a financial blogger is arrested or being sued by his followers for financial losses.

      Look, even in the religious realm they dare to scam their followers. What more in the financial realm where GREED and FEAR are much easier to prey on?

      Human nature.

      Delete
    4. Hi SI,

      Good book ah? I'll go check it out. The only time I read for work is during my first two years in my career, where I read up on a lot of such classroom/psychology/pedagogic books. Since then, all is for leisure, so you're not the only one :)

      Delete
    5. Sorry LP,

      If you want the book its teach like a pirate

      NOt parrot, typo

      Delete
    6. Hi SI,

      WAH, pirate very different from parrot! LOL

      Delete
    7. Sillyinvestor and LP,

      Ah so!

      I was scratching my head how can "teach like a parrot" be good?

      When I use the word "parrot", it wasn't exactly complimentary...

      LOL!


      That's more like it!

      Its ahoy matey; and wine, women, and song!

      Now that's passion I can relate to!

      Delete

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