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10 Quotes from: Where Are the Customers’ Yachts?

where_customers_yachtsMarkets can be very violent on the downside. The old saying —  Markets ride the escalator to the top and the elevator to the bottom — is still quite relevant.

The past week or so has been a rocky one to say the least. This is the time to review the lessons learned from the past. The alternative of listening to hysterical nonsense from forecasters will only lead you to heaps of trouble.

Where the Customers’ Yachts? is a timeless relic which should be read by anyone who professes the slightest interest in finance.  Though written after the infamous 1929 crash, its contents are completely applicable in 2016. In the words of Mike Bloomberg in his review of this classic tale, “The more things change, the more they remain the same. Only the names have been changed to protect the innocent.”

Here are ten quotes that can serve as a force field to ward of investment charlatans. Ignore these quotes at your own peril:

  • Wall Street Greed“At the close of the day’s business, they take all the money and throw it up in the air. Everything that sticks to the ceiling belongs to the clients.”  Merrill Lynch Structured Notes, anyone? Yes, the customers got to keep 5%.
  • The Value of Market Predictions “It seems that the immature mind has a regrettable tendency to believe, as actually true, that which it only hopes to be true.” 90% chance ‘Remain’ wins the referendum… OOPS!
  • Financial Salesman Having an Answer to the Unanswerable “Now if you do someone the single honor of asking him a difficult question, you may be assured that you will get a detailed answer. Rarely will it be the most difficult of all answers – ‘I Don’t Know.’” Market pundits who were completely wrong on Brexit, telling you what to do now.

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