Here’s the story of one of the greatest, most ingenious stock market scams I’ve ever heard about.
You like money, right? But making money is tough. It takes a long time to accumulate riches.
But that doesn’t keep most of us from dreaming about someday striking it rich without much effort.
(I’m sure you know what I’m talking about, lol)
So, any kind of scam that can “trick” you into thinking that you’ve discovered the secret to alchemy will generally work like a charm. Only problem is the only guy getting rich is the guy selling it.
Anyhow, here’s how the scam goes, from the customer’s perspective.
You get a letter in the mail, claiming some guy has reverse engineered the stock market. Maybe something about market psychology and advanced calculus.
The letter predicts that Google will go up that week.
No big deal, right?
Then Google goes up.
Then you get another letter, from the same guy. With another complicated explanation, saying Google will now go down.
Then Google goes down.
Ok, still lucky, right?
But then you get another letter. Saying Google will now go up.
And it goes up.
Suddenly you’re VERY interested. This guy was right three times in a row.
Then, to your shock, amazement, you get FIVE more letters. Each one accurately predicting the price of Google stock (up or down) for the following week.
Now you’re convinced. Even though the net gain or loss each week is one or two percent, you get out your calculator.
If you “only” invest $500, and “only” make two percent a week, that’s over 100% gain per year. Keep this up for a few years, and you’re retired.
How much would you pay for such a system? Probably a lot. After all, isn’t being able to accumulate a few million dollars in a few years worth a few thousand up front?
Of course it is!
Then you get the “pitch” letter, selling you the system for “only” $500.
No brainer, right?
Hang on there, pal. Remember, this is a scam. A con. A ruse.
Here’s how it works.
The “guy” buys 64,000 mailing addresses.
Then he splits them in half.
The first week, 32,000 get a letter saying Google will go up. The other 32,000 get a letter saying Google will go down.
Now he’s got a list of 32,000 that think he was right once.
He takes that group, and splits it in half.
He tells 16,000 Google’s gonna go up, the other half he tells them it will go down.
Now he’s got a group of 16,000 folks that think he’s been right twice.
8000 will think he was right three times.
4000 think he was right four times.
2000 think he was right five times.
1000 think he was right six times.
Then he “pitches” the 1000. $500 a pop.
Say only a quarter buy. That’s $125,000.
The actual formula he sells them? It’s so complicated they can’t figure it out, and never know it was a scam.
He spends $25,000 on another list of 64,000 “suckers,” and off he goes again.
Netting $100,000 every few weeks.
Scams are everywhere.
Be on the lookout by knowing the signs, and the signals. If something sounds too good to be true, it usually is.
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