10%...PER MONTH!

[tede02]

Someone I know took one of these get rich quick trading classes within the past few years.  I'll refer to the person as Bob.  Sadly the strategy hasn't made Bob rich.  Yet, Bob told me today, quite convincingly, that he keeps in touch with the person who taught the class and that this person is earning 10% per month. 

 

Now, I like Bob so I tried to be polite.  I grabbed my financial calculator and showed how 10% compounded monthly for a year over triples your money.  I proceeded to show Bob how $10k turns into $3 million in five years, and nearly $1 billion in ten.  Bob was a little surprised and said it must not be 10% "every month." LOL

 

One thing Ed Thorp said in his memoir was when he started learning about the markets and investing, he realized how little is known by so many.  That seems just as true today.  In-fact, there is so much noise (CNBC, 24 hour news, a zillion blogs, etc.) to distract people, perhaps the environment is more challenging for the masses than ever.  Another way to put it is with all the noise, and the ease of trading via online platforms, it is probably easier than ever to make mistakes. 

 

The paradox is investing professionals seem to be having as hard a time as ever relative to the markets.  Perhaps that will change when the cycle finally turns but it is quite interesting. 

 

Just some random thoughts from my day. 

[DTEJD1997]

Someone I know took one of these get rich quick trading classes within the past few years.  I'll refer to the person as Bob.  Sadly the strategy hasn't made Bob rich.  Yet, Bob told me today, quite convincingly, that he keeps in touch with the person who taught the class and that this person is earning 10% per month. 

 

Now, I like Bob so I tried to be polite.  I grabbed my financial calculator and showed how 10% compounded monthly for a year over triples your money.  I proceeded to show Bob how $10k turns into $3 million in five years, and nearly $1 billion in ten.  Bob was a little surprised and said it must not be 10% "every month." LOL

 

One thing Ed Thorp said in his memoir was when he started learning about the markets and investing, he realized how little is known by so many.  That seems just as true today.  In-fact, there is so much noise (CNBC, 24 hour news, a zillion blogs, etc.) to distract people, perhaps the environment is more challenging for the masses than ever.  Another way to put it is with all the noise, and the ease of trading via online platforms, it is probably easier than ever to make mistakes. 

 

The paradox is investing professionals seem to be having as hard a time as ever relative to the markets.  Perhaps that will change when the cycle finally turns but it is quite interesting. 

 

Just some random thoughts from my day.

 

I can totally relate to your story...

 

A few years ago when I was living in Houston, I had an associate that I knew reasonably well.  Every month he would have an expense account to take out "business associates & prospects".  I would never be one of his prospects, as we were in totally different businesses/spheres, but he was nice & took me to one of these lunches one day.  Towards the end of lunch the topic of discussion turned to making money/investing.  My host admitted to me that he had not made any retirement investments...and he was AT LEAST 10 years older than I was.  At that time, I was working on evaluating CLWY and was almost finished.  I told him about it, and I thought the stock could TRIPLE or even more in the long term.  He furrowed his brow and queried, just how long do you think it will take to go up?  I responded it was hard to tell, but probably in about 18 months?  Maybe a bit less, maybe a bit more?  The interesting thing was that the Houston real estate locations were worth MORE than the market cap of the company at the time, quite a bit more.  I was very excited about it and was buying along with family members...I said it was very rare to come across a situation like this.

 

My associate thanked me, but he would need to make a good return before he could invest anything for retirement.  I was surprised that this would not be sufficient.  What would he consider acceptable?  Something like a 10X return...or more...

 

Needless to say, he never invested in CLWY, and the funny thing is that it is up like 8X in 5 years?

 

As of a couple of years ago, he never invested in anything, and has never set up a retirement account.

 

Heck, this guy might even be interested in 10% a month returns...just not lucrative enough!

 

I am sure there are many, many, many people like him out there!