Got called by a stock broker today - felt like I was trying to brush off an unwelcome advance

[ddeclue]

:rant:

<rant>

I was called by a stock broker today - felt like I was trying to brush off an unwelcome advance from a suitor - it really felt icky like that...

I was referred to this stock broker as being a potential customer (I will not use the word "investor" to describe what he wanted me to be!) by a mutual friend.

What I really wanted to tell this broker but didn't because I didn't want to hurt his feelings or hurt my friend's feelings was that I just don't have any faith at all in the fundamental integrity of the stock market or retirement investing in general.

There seems to be two classes of people in the stock markets - those with inside information who are members of the elite who know people on corporate boards or who are people on corporate boards - and the rest of us who I believe are just better off taking our money to Vegas or Atlantic City, at least there you know the rules and you basically have the same information as the house.

These elites seem to be playing the game of "heads they win - tails I lose" and like the computer "WOPR" in the 1983 movie "War Games" the only winning move for me seems to be not to play



The only stock I've ever owned was with my employer Kroger back in the 1980's through their ESOP program and then with my bank when it got bought, one of my accounts got converted to bank stock. The end result is that I've never made a dime in the markets and the bank stock (Wachovia) ended up losing 90%+ of its value last year, maybe its part of the way back now but it may take many years before it is ever back to where it was.

I feel like the markets have become far too complicated for ordinary mortals to understand (and I say this an engineer and a programmer who makes his living understanding highly complex systems) and the investment instruments have become far too disconnected from the actual main street economy of making and buying and selling of things.

For the last 15 years I've see speculative bubble after bubble inflate and then burst - there were technology companies that didn't deliver on fictional products, energy commodity markets that manipulated energy prices on fake unregulated energy markets, real estate prices that were inflated through artificial investment instruments designed to disconnect the risk of loaning money from the reward so that loans could be made to questionable borrowers to keep that market rising in spite of the fact that no one was making any more money than before so the aggregate demand should have remained flat.

Now that the market has crashed it seems that the bubble is once again being re-inflated partially as the result of a government bail out of investment houses that were "too big to fail". Yet none of that investment money seems to be making its way into the actual world of MAKING THINGS and selling them to consumers.

The fact that the NYSE is flirting again with 10K only makes me wonder how close we are to the re-bursting of this re-inflated bubble of speculative hot air.

We are also seeing people speculating in currency and gold and oil most recently as the dollar is diving, gold is going ballistic and oil is rising again - all without any apparent connection to actual consumption of gold or oil by consumers or industry. In fact one would think that with all those consumers out there selling their jewelry for cash that the supply of gold would be rising faster than the demand for it and the price of gold should be falling.

Basically, I feel like the very fundamentals of our economy are now officially and formally based on bullshit and I don't know the rules and I don't have the information necessary to make an informed decision in the markets. I would be just taking what little money I do have after paying the bills and giving it to someone else in that market who DOES get the inside info that I don't get.

I know I'm supposed to be saving for retirement and I know I'm supposed to be buying a house (I'm 43 years old) but I just can't bring myself to do it. If I do anything it will be to buy a house if I can ever get ahead enough but even that seems unreasonable if I have to save up 20% down payment and average houses are still going for $175k after their slump.

I don't know, even if I had the money to invest in a house whether that would be wise given that there is still a very stong possibility of the housing market collapsing further - if I bought now and it collapsed another 25% in prices I'd be screwed.

I just wish I could trust these guys, I wish I could have told this guy I trusted him or his profession but I just couldn't do it so I had to tell him I wasn't interested.

That makes me feel sad about my future and makes me feel kind of icky about our economy even though I finally have a relatively good job now after about 7 months unemployment in the last 2 years.

How and when can we get our economy back to the fundamentals of actually making widgets here in America and selling them so that when I decide to buy stock in a company I actually can know about and trust in how they actually make money and add something positive to the universe?

There needs to be a serious re-regulation of the stock markets and commodity markets.

People who buy stocks and commodities need to be forced to hold their positions for at least 180 days (two business quarters) before being allowed to sell. This will put an end to a lot of the predatory speculation in commodities like gasoline that artificially create $4.00/gallon price bubbles that hurt the 99% of us not invested in gasoline futures.

All publicly traded companies need to be independently audited by the government and that report should be the only allowed prospectus for investing in these companies.

The government needs to get serious about prosecuting insider trading.

Finally, publicly traded companies should be forced to provide not just health care but secure pensions not invested in the market as in the old days - this should be treated as a legitimate cost of doing business because requiring people to speculate and gamble in the markets for their retirement futures in the absence of adequate and accurate and equal information for all involved simply is an excuse to steal ordinary people's pensions and give them to the insider elites so they can buy 100 foot yachts with helicopters instead of 50 foot yachts with dingys.

</rant>

Unhappy in Orlando,
Doug D.

[Blecht]

1. nice rant

If you're a 1st-time home buyer you only need 10% down. I'm in the process of buying my first home, and I'm a little older than you are. I'm also as disillusioned as you seem to be.

I think it's a safe bet to say anything involving a bank or an investment is there to enrich the banksters -- we're just the marks. We're screwed unless there are big changes, and I don't see any happening.

[ddeclue]

2. Banksters! - I like that one!

:rofl:

[KharmaTrain]

3. I Get Many Interesting Calls These Days

I've been involving with investing and am familiar with many types of pitches out there right now. I totally concur that their tone is both creepy and desperate. Being a conserative investor, I'm not a good mark for a get rich quick game but know plenty who play those games and how these cattle calls can yield some quick money. Just the other day I got a call...actually several so far from a noted investment house inviting me to a seminar at a fancy restaurant where I'm sure it's going to be hard sell between $40 sirloin steaks. I'm not interested in going, but it's in line with pitches I regularly hear about how now is a great time to "recoup" losses and ride the down market for short-term gains. Again, I'm not interested. I've shed almost all my stocks and have no desire to play the ponies and reward the gamblers.

You are also spot on about the greed and insider games. That's a major reason I got out of the market as well. For several years I had a partner who worked for J. P. Morgan. While he worked as a "due dilligence" officer during the day, at night he was doing his own wheels and deals...many nights right from his JP Morgan office. Regularly he would tell me about a pending IPO...many based on the flimsiest of business plans (this was during the dot com boom)...and would even predict (accurately) where the stock would open and then the "trigger point"...where the "smart money" would sell, make their profit and then stick the other daytraders with a dead stock. This was just one of many games played that fleeced billions from the economy and led to its near collapse.

I've been patient with the actions President Obama has had to take as he came in with the banking system on the verge of total implosion...and with it there was a real possibility millions would lose jobs, life savings and totally paralyze the country. Now that it appears this crisis has been stabilized, I am getting impatient for him to fix what is wrong and still remains very broken with the economy. Reregulation is going too slow and the recovery isn't reaching the middle class...the consuming public who are the engine for any turn-around. Even worse, the credit cruch is still biting hard with little relief. Something should have been done now but this is added to a plate that is already too full and a political and corporate establishment fighting against any change.

Cheers...

[ddeclue]

4. One way in which it feels sleazy is that they are using my trust in my friend

to try to get me to trust them with my money when I don't really trust the institution as a whole.

:hide:

[KharmaTrain]

6. You Are Totally Justified

I've gotten that pitch. It used to be "tell your friends" or "if you know someone who wants in..."...but those were in the days of easy money. If the broker couldn't land one fish, he knew there were many others in the sea. Now it's slim pickings while the pressure from above is intense to "produce". I've seen a lot more hardsell and hard asses as things have gone sour.

Not sure why a friend would want to give your name...but then I'm very private in my dealings and trust few. You are fully justified in not trusting the markets as they sure were ready to throw you and me and many others under the economic bus while playing their gambling games.

Cheers...

[ddeclue]

7. I strongly felt I had to write about this experience today because of how much it reminded me of

the movie War Games where "WOPR" had to figure out by testing all the options that there were games that you just can't win at like tic-tac-toe and global thermonuclear war - I just have intuitively come to the same conclusion as WOPR over the years but did it without nuking (except for maybe a few thousand dollars of bank stock that started out as about 800 dollars of bank stock) my money.

I think I'm going to see if WG is out on Blue Ray tonight.

[onethatcares]

5. like you, I have been

receiving the same calls and mail invitations. I'm about ready to go and eat one of their steaks and leave. If you're in my neighborhood, and it's convenient,we'll have to hit one of them up. Of course they'll have to be one on the evening we can get together.

peace.

[KharmaTrain]

8. I've Taken The Dinners Before...

About five years ago, I got the royal treatment...dinner at an exclusive club and the pitch to purchase satellite stock. I was told it couldn't miss, how it was the wave of the future...ground floor with blue skies galore. However, I knew better...knew the company had already dug itself into several billion in debt and wasn't coming near its subscriber projections. At the time the stock was around $10 a share and I was told it would double in less than five years. Today it's hovering around $1. But the steak was delicious! I'm tempted to do it again and see what scam they're trying to pitch.

Cheers...

[ddeclue]

9. As I suspected, I got called by my friend last night to ask me why I blew her friend off..

I had to tell her the truth.

She lectured me about how I should be investing and how I should trust her friends.

I told her I didn't trust anything financial and probably wouldn't for a long long time until the whole system is re-regulated and investigated. She didn't understand.

Oh well..