Hi Guys,
Here’s a disturbing quote:
"The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in a democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country.
We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings cooperate in this manner if they are to live together as a smoothly functioning society."
That's frightening!
These are the two opening paragraphs from the father of propaganda Edward Bernays 1920s book surprisingly titled “Propaganda”. I’m sure Professor Snowball could elaborate on this subject and on Bernays extensively.
By the way, that thin book is easily downloaded by visiting the following address:
http://www.voltairenet.org/IMG/pdf/Bernays_Propaganda_in_english_.pdfFor me, propaganda is the semi-science of distorting facts, telling half-truths, selective presentation of material, biasing the subject matter, and, in some instances, lying to advance some often hidden agenda.
I only mention the art of propaganda because I recently discovered an outlandish book while cleaning out my investing book shelve. The book in question is titled “Making 36% by Dr. Terry F. Allen. I have the 2008 version which apparently is frequently updated. Dr. Allen promises that target outsized return using an options trading strategy with near zero downside risk. Wow, but is that remotely plausible?
That’s quite an arrogant claim given that an annual 36% return after costs is about 70% more than Warren Buffett’s long term record. That almost sounds like it’s too good to be true. In fact, it is too good to be true. Buyer beware!
Dr. Allen has a hard time documenting his claims. He still publishes revised editions of his book, and his claims now come with a warning that downside risk happens. Really! I suppose that adjustment was mandatory because of a 2006 SEC litigation against his practices. Here is a Link to the SEC document:
https://www.sec.gov/litigation/litreleases/2006/lr19725.htmNow that’s problematic. Allen doesn’t show much evidence to support his profit claims, likely because his options methods have morphed over the years as he has attempted to explain his bad years to assuage his dissatisfied customers by constantly adjusting his failed techniques. The likelihood that 36% annually over any sustained investment period is purely an illusion.
It’s amazing that extravagant and unsupported claims survive for as long as they do. One explanation is that master manipulators, like Edward Bernays, have successfully developed and practiced their Black art. Calling it a Black art is a little unkind. Propaganda has been deployed for useful purposes also.
The best defense against investment misinformation is to be familiar with the real facts. As Jack Webb famously said: “Just the facts ma’am.”
Guys who in the past were professionally recognized as propaganda experts now function as Public Relations consultants. It’s a softer title, but the product line can still be dangerous to the individual who buys their sales pitch.
Yes, I tossed the “Making 36%” book into the garbage where it really belongs.
Best Regards.
