April • May 2008 • Vol. XXVI No. 4 • An Arnold Publication

From the Editor—
 

How to Survive in the Wall Street Jungle—

I read somewhere that nearly 80% of Americans have financial interests in the stock market, either directly or through their IRAs, 401Ks, or pension plans. I also read that only a small handful of people really know anything at all about how Wall Street works, which on the face of it, seems a bit foolish.

Once, when I mentioned to a friend that I was planning to invest some money in the stock market, he laughed and said, “Chuck, if you were planning a trek through a jungle, wouldn’t you prepare by finding out ahead of time what kinds of predatory animals lurk there?”

“Of course,” I responded, “It would be stupid to do otherwise.”

“Well, then, you’d better realize that the stock market is a jungle, too,” he said, “filled with grinning, seductive predators just waiting to gobble up the life savings of the unwary. You’d better do some research before you go into that jungle.”

“What about hiring a guide?” I asked. “A stock broker, or a dealer or a financial planner to tell me what to do?”

“That might help,” he said, “but if you take a close look, you’ll see that Wall Street is littered with their slaughtered bodies, too. Often, it’s a case of the blind leading the blind or they’re predators, too, only interested in making commissions when you buy and sell. Beware!”

Well, I ignored my friend’s warning and went ahead into that jungle. The result? I lost 75% of all my savings in the high-tech crash that lasted from 2000 through October 2003. Reeling from the shock, I clamped my jaws and became determined to learn something about that jungle. How did I do that?

I bought lots and lots of books. I read thick books about Dow theory, wave theory, about long-term trading, swing trading, day trading, mutual fund trading, futures trading, options trading, commodities trading, foreign exchange trading, you name it.

A lot of those books were “You, too, can get rich quick!” shams. Most of them told me how to pick an investment, how to perform a trade. Most of them had frequent warnings like, “Beware, the market is a dangerous place!” But none of them ever told me anything about the kinds of predators in the market and how they hunt for innocents like me—until I found an odd little book entitled “How to Prosper in the Wall Street Jungle.”

The book, written by Scott Brown, Ph. D. is based on his research into the history of the market and how the predators have hunted from the beginning. The book’s subtitle is “The Wallet Doctor’s Survival Guide to the Stock Market,” which is a little misleading, because it doesn’t really tell you how to survive, but it does detail the fascinating history and methods of major Wall Street dirty tricks, right from the beginning of the street to the present day, including such catastrophes as Enron and other major rip-offs.

If you’re in the market now or thinking of getting into it, I strongly recommend you do a Google search for this book and read it. It just might save your life.

                                                                                                                                   C. H. Bush, editor