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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: mishedlo who wrote (29501)5/6/2005 3:24:58 PM
From: Knighty Tin  Read Replies (3) of 116555
 
The Daily Reckoning really smacks around the investment industry in the last article of this issue. Since I am one of the charlatans he talks about, I have to pick some nits. 1. He is talking about an old Wall Street where clients "adored" brokers. At least before I had ever heard of Wall Street. Most clients I meet start out believing I'm a crook long before their first trade. Oddly enough, most think mutual fund managers are pretty straight. Uh, who just got busted by Spitzer for late trading and front running? Mutual fund managers. 2. Brokers make more money if their clients make money. Pretty simple equation. 3. Squeezing all the money out of one client, discarding him and finding a new one is MUCH more difficult than keeping the first one as a continuing cash cow. And brokers are lazy. O.K., I'm lazy and I'm a broker.

The truth is, most brokers and fund managers are seriously trying to help their clients make money. Even the very worst ones. The real problem is, making money is damned hard and in the long run, it is a zero sum game. If you make money, somebody has to lose it, adjusted for inflation and taxes. It resembles a poker room where you play against other players and the house just takes a piece off the top. The trick is to not go all in on 7/2 offsuit just because a broker thinks it's a good idea.
dailyreckoning.com
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