Larry, Moe and Curley, Investment Brokers
Larry, Moe and Curley were sitting in their
favorite restaurant just off Wall Street having
their usual 3 martini lunch and were discussing
the day's events and their client portfolios. Larry:"I had 12 calls this morning
from customers wanting to know why the
market was going down". Moe: What did you tell them?" Curley: "Yeah, what", taking another
gulp of his libation. Larry: "You know, the usual. This is
a normal correction and not to worry. I am
watching your account. The market always
comes back." Moe: "That's the same BS I tell them." Curley: " I have more than 300 accounts
and I can't watch them except my 5 big
traders. Who cares about the others anyway?
My company won't let me tell them to sell when
their stock starts down and they believe the old
saw about 'hang in there for the long haul'. I
blew out of all my stocks last week. Thank
goodness. The market has dropped 300 points
since then. Moe: "It would be better for the customers
if our company would let us tell them to use
stop loss orders." Larry and Moe, shouting in a single
voice: "Don't say that or we'll get fired". They
both bonk him on the head spilling his drink.
"Nyuk. Nyuk." Yes, it may sound funny, but there is
more truth than fiction in that imaginary
conversation. Why don't brokerage companies tell
their customers to sell when the market is
declining? There are two reasons. First any large
brokerage does not want to get on the bad side
of a company. That company might have a public
offering later on and they will definitely not
be asked to sell any of the stock or bonds. This
is where the big money is on Wall Street.
The second reason is they don't want the
customer to have cash in his account. He might
take it out. Brokers make money even if you do
not trade. It is not much, but it does keep the
pilot light lit. Brokers also discourage customer stop loss
orders because it is more paper work for them
and then they do have to watch your account.
Unless your account is high 6-figure or 7-figure
you are not on the radar screen. Mr. Broker (an
appropriate name for what he does with your
money) has an average of 300 accounts and many
have 600 or 700. As new guys come into their
office they give them the little accounts. When a broker passes his securities license
he is given two manuals. One is SEC regulations
that must be followed and the second is how to
open accounts. There is no third manual on how
to protect customers' money or trade. Brokerage
companies want their salesmen to follow the
company line and push certain products. There is
no thought of customer protection. If your broker is Larry, Moe or Curley it is
time to find a new one. 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.
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