Trading Stocks and Waxing Cars is Easy – Just Ask the Guy on the Commercial

I don’t know whether to take it as an insult to intelligence or marketing genius. I love these late night infomercials or the commercials on satellite radio that market the secret formula for making millions in stocks.

“Hey Bill, where did you get that new car, that new house, and that new speed boat?” “Why Jack, I made that money trading stocks in my spare time.”
“How did you ever learn to trade stocks?” asks Jack.
“I simply went to this website and ordered this CD that tells me everything that I need to know. Anyone can do it.”
(I really cannot make this stuff up)

As I listen to those types of commercials, a few thoughts cross my mind. First, could that type of commercial really entice someone to call and order some informational CD, suckering them into spending thousands of dollars on some bogus stock trading system? Second, if these companies are spending all of this money marketing this garbage, it must work. Finally, this type of marketing is intended to appeal to a powerful emotion.

Show me the Holy Grail, something that is easy, and a slam dunk way to make money.

The problem is that it doesn’t quite work that way. As Michael Covel says in his excellent book called “Trend Following,” there is no holy grail. There is no slam dunk way to make money in trading stocks. Even the greatest of stock traders will tell you that no one has it figured out.

Trading stock is tough. If it weren’t, everyone would be doing it and no one would be losing money. Unfortunately, stock trading doesn’t quite work that way. Always remember marketing often creates a fantasy world that has a slim chance of actually turning into reality.

Don’t become a marketing casualty. The bottom line is that there are no slam dunk solutions.

I wish I would have known that the day I bought a bottle of that miracle car wax at the State Fair. If you have been to the car show, you probably saw the presentation. It is the wax that turns your faded dull car instantly into a brand new shiny car. You can set your hood on fire (I didn’t actually try that one) and nothing happens to the car.

Well, years ago I tried it on an older car with faded paint. Imagine that! My paint didn’t turn out to be a shiny new car again. Why? Because there is no slam dunk solution!

All contents copyright © 2007 Prudent Money and Bob Brooks. All rights reserved.