Boiler Room 7/17/00

On Friday or Saturday evening my wife gets a movie from Block Buster and after dinner we sit, hold hands and watch. This week she brought back one that I think every investor or anyone contemplating investing in the market should see. It is called "Boiler Room".

How many times have you been called out of the blue by some no-name broker who wants to make you rich provided you buy shares in this great new issue or some stock that is just about to "take off".

Usually they start off with do I remember he called me 6 months ago and recommended so-and-so issue that is currently in the news because it has gone up 100 or 200%. He did not make that call and if he had I am sure I would not remember it. Also the name of his firm is one I never heard of, but it sounds very legitimate and he might even say they are affiliated with Chase Manhattan Bank or some other big bank. They might have their checking account with that institution, but otherwise they have no connection with them. Now he has another recommendation that is going to do even better that that one. Yes, and pigs can fly!

If you haven't done so yet don't let him go any further. Hang up. Oh, I know you can't because your mother taught you it is rude to hang up on people. Please, this time DON'T listen to your mother. He will try to get you into a conversation by asking simple questions that must be answered with a "Yes". Stop listening. If you can't bring yourself to hang up then put the phone down and walk away. In 10 minutes he will be gone to call another sucker.

There really are boiler rooms out there selling worthless securities and everything they do is 100% within the law and 100% immoral. How do I know this? I used to own a brokerage firm and I received monthly reports from the regulatory agencies outlining charges against these shady dealers. Fortunately, I did not have those problems as I would not allow hype to open accounts.

The things being told on the phone are usually too good to be true and that is a fact. Do yourself a favor and rent that movie. Not all brokerage firms are like this, but remember my basic rule.

NEVER SEND MONEY TO A VOICE ON THE PHONE.

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 http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

Copyright 2005

In The News:

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New stock ideas boost equity mutual fund portfolios  LivemintIt is imperative for mutual fund houses to beef up their research capabilities, to be able to identify more winning new ideas.
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Top 10 mutual funds which can double your wealth in long term  The Financial ExpressMutual funds are one of the most popular and smart ways for investors to build wealth over the long term. One can also double one's money, if planned properly.
How do mutual funds help you to invest better?  Moneycontrol.comMutual funds can provide you products that can meet your financial goals with relatively lesser risk.
Why your mutual fund earned you less than Nifty in recent market rally  Economic TimesThe more the number of stocks in an index, the weaker is its performance.
5 strategies for investing in mutual fund in the current market to get good returns  Moneycontrol.comMutual fund investing is all about ascertaining your goals and setting out to reach them.
List of best mutual fund portfolios as per your risk appetite  Moneycontrol.comYou can build a portfolio of mutual fund schemes based on your risk profile.
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These 18 consistent mutual funds may help you to beat stock market volatility  Economic TimesMany equity mutual fund advisors abhor volatility in the stock market. They are always searching for ways to tackle this beast which gives them sleepless nights.
Do not make these 7 mistakes while investing in mutual funds  Moneycontrol.comNever forget that you are investing because you have to achieve your financial goals. Investing without a goal is akin to travelling without a destination.
Some international funds are giving around 40% returns. Should you invest?  Economic TimesInternational mutual funds are topping the return charts. The category has returned around 20 per cent in one year. Should retail investors bet on these schemes ...
Choose your mobile app wisely to invest in direct mutual funds  Moneycontrol.comSome mobile apps are not updated on regular basis. Often there may be errors in the stocks portfolio of several schemes.
Bleeding mutual funds: Should you go back to good old fixed deposits?  Moneycontrol.comAre you worried about the losses on your investments in mutual fund schemes? You are not alone. There are many investors who dumped their good old fixed ...
Fund managers' bets: Top 10 large, mid and small-cap stocks that MFs bought in October  Moneycontrol.comMF industry assets grew to Rs 22.2 lakh crore on the back of improved inflows into equity-oriented and liquid funds.

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