"Don't Fall For It" -- A Gem by Ben Carlson

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Taylor Larimore
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"Don't Fall For It" -- A Gem by Ben Carlson

Post by Taylor Larimore »

Bogleheads:

This is the latest book by author and advisor, Ben Carlson. In this book, Mr. Carlson tells us how easy it is for us to be duped into financial schemes.

Fraudsters, con-artists, and charlatans are everywhere -- and they know just how to draw us in. In addition to a fascinating story about how thousands of investors, including many sophisticated investors, have been cheated, Mr. Carlson's latest book tells us how we can avoid becoming another victim.

Below are excerpts (without Mr. Carlson's in-depth descriptions of individual fraud cases):
"There is an old saying that the data will tell you anything if you torture it long enough."

"Certain people have the ability to convince others they can make the impossible become routine."

"Being active in charitable causes, politics, or the local community are all wonderful ways to get people off your scent when bilking unsuspecting victims in a financial scam."

"There's no secret formula to earn vast riches overnight in the stock market."

"People who often seem the most trustworthy are also the ones who possess the ability to take advantage of you. Trust but verify."

"Every year Americans spend more money on the lottery than they do on movie tickets, music, professional sporting events, video games and books combined."

"According to The Certified Financial Planner Board of Standards, almost one-third of lottery winners declare bankruptcy."

"When you make a ton of money, especially at a young age, there are bound to be vultures from the financial industry who are circling to take advantage of that newfound wealth."

"Shorting stocks may sound like a lucrative strategy until you actually do some digging and realize how hard it is to pick the losers in the face of a market that mostly rises over time."

"We become overconfident in our abilities and attribute success to our own skills and failure to bad luck."

"Everyone gets taken. But it's the most sophisticated ones who are taken the most."

"There is so much data, analysis, opinions, and information available that you can spin almost any argument in your favor if you so choose."

"Forecasts may be exciting but they tell you nothing about what the future has in store."

"Experts do play a vital role in society in a number of ways, but predicting the future is not one of them."

"Investment frauds using made-up returns will never go away."

"There will always be someone wealthier or more successful than you, so the comparisons will never stop if you allow them to take over how you view your standing in life."

"Speculation is an effort, probaby unsuccessful, to turn a little money into a lot. Investment is an effort, which should be successful, to prevent a lot of money from becoming a little."

"You only have to place your trust in the wrong individual or organization once to ruin your financial future."

"All else equal, a talented sales staff will trump a talented investment staff when attracting capital from investors."

"Bull markets make us believe we're invincible just as bear markets make us feel like idiots."

"Hope is never a good investment strategy, but it makes for a wonderful sales tactic."

"Technological innovation isn't a prerequisite for fraud to occur, but it sure makes it a whole lot easier."

"There's an old saying that markets take the stairs up but the elevator down."

"When you combine intellect, passion, and people who would like to make a boatload of money, it's easy to develop blind spots to potential risks involved on these schemes."

"Charlatans are difficult to avoid because there are always those who can be charmed by a good sales pitch from an intelligent-sounding fraud."

"Retirement planning, portfolio management, investment strategies, and personal finance are all forms of guesswork in many ways."

"There is no greater fraud or charlatan in modern financial history than Bernard L. Madoff. Madoff swindled banks, hedge funds, wealthy investors, celebrities, and charities with his $65 billion Ponzi Scheme."

"There is no proven way to earn a high return on your capital without taking some form of risk."

"If you can't prioritize your spending habits, you'll never be able to save enough to get ahead, no matter how much money you earn."

"Six Signs of Financial Fraud: (1) The Money Manager Has Custody of Your Assets. (2) There is an Aura of Exclusivity in the Pitch. (3) When the Strategy is too Complicated to Understand. (4) When the Story is too Good to be True. (5) When the Returns Are Ridiculously Good. (6) When They Tell You Exactly What You Want to Hear."
Thank you, Ben Carlson.
Taylor
Jack Bogle's Words of Wisdom: “The demise of the fiduciary rule would be a step backward for our nation, allowing Wall Street to continue to profit by providing conflicted advice at the expense of working Americans saving for retirement,”
"Simplicity is the master key to financial success." -- Jack Bogle
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Re: "Don't Fall For It" -- A Gem by Ben Carlson

Post by Fallible »

Thanks, Taylor. I'm waiting for it from the library, which has only ONE copy!
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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Re: "Don't Fall For It" -- A Gem by Ben Carlson

Post by Dasnyc »

Thank You Taylor for sharing. I know that when I see your name on a posting, I can count on reading good information or advice.
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Barry Barnitz
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Re: "Don't Fall For It" -- A Gem by Ben Carlson

Post by Barry Barnitz »

Hi;

Taylor's post has been added to the wiki: Taylor Larimore's Investment Gems.

regards,
Additional administrative tasks: Financial Page bogleheads.org. blog; finiki the Canadian wiki; The Bogle Center for Financial Literacy site; La Guía Bogleheads® España site.
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Re: "Don't Fall For It" -- A Gem by Ben Carlson

Post by abuss368 »

A lot of good advice there for all investors. Thank you for sharing Taylor!
John C. Bogle: “Simplicity is the master key to financial success."
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Re: "Don't Fall For It" -- A Gem by Ben Carlson

Post by bondsr4me »

Jack Bogle's Words of Wisdom: “The demise of the fiduciary rule would be a step backward for our nation, allowing Wall Street to continue to profit by providing conflicted advice at the expense of working Americans saving for retirement,”
[/quote]

I agree 1000% with the above Jack Bogle quote.

Without getting into politics, which is not allowed on the forum, I certainly hope the current administration (and any admin) and Congress have the guts and backbone to come up with and keep a fiduciary rule...and maybe improve on the previous one.
Personal investors need all the protection they can get. We all need lawmakers to stand up to Wall Street.

Financial fraud happens all the time and consumer protection is much needed.

Thanks for the post Taylor.
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Taylor Larimore
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Barry Barnitz

Post by Taylor Larimore »

Barry Barnitz wrote: Sun Feb 16, 2020 2:48 am Hi;

Taylor's post has been added to the wiki: Taylor Larimore's Investment Gems.

regards,
Barry:

When I think of you, which is often, I am reminded of Jack's words below.

Thank you and best wishes.
Taylor
Jack Bogle's Words of Wisdom: "The great game of life is not about money; it is about doing your best to join the battle to build anew ourselves, our communities, our nation, and our world."
"Simplicity is the master key to financial success." -- Jack Bogle
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Re: "Don't Fall For It" -- A Gem by Ben Carlson

Post by lostdog »

Thank you Taylor. We're truly grateful for this forum. We could have easily been sold a complex annuity or whole life policy had we not been educated from this forum.
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Re: "Don't Fall For It" -- A Gem by Ben Carlson

Post by oldzey »

Thank you for your latest Investment Gem, Taylor!
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman
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Re: "Don't Fall For It" -- A Gem by Ben Carlson

Post by rpguy4 »

Ben Carlson was also featured on Morningstar's Long View podcast - Feb. 5, 2020
https://the-long-view.simplecast.com/ep ... en-carlson
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Re: "Don't Fall For It" -- A Gem by Ben Carlson

Post by fortyofforty »

Good stuff, as usual, Taylor! Thanks!
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Re: "Don't Fall For It" -- A Gem by Ben Carlson

Post by Gnirk »

Thank you Taylor. It becomes even more important to be aware of scams as we get older, and are more likely to be preyed upon by fraudsters and scam artists.
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Re: "Don't Fall For It" -- A Gem by Ben Carlson

Post by yangtui »

"Being active in charitable causes, politics, or the local community are all wonderful ways to get people off your scent when bilking unsuspecting victims in a financial scam."
+1

This is a good point. If you want to engage in unethical/illegal behavior of all kinds these are good hedges to throw people off. Whenever I hear about philanthropic behavior I always question why I am hearing about it (marketing) and what are the true motives of the individuals giving the money.
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