Then The Charlatans
Charise Scrivner
The prompt was an Italian video but the message, as the techniques used to lure victims, is universal. I like the idea of starting from this video because, at a certain point, the interviewer submits the charlatan the typical hard questions that are raised to challenge charlatans.
I already spoke about the video interviewer in another post. I find it extremely sad that someone who managed to introduce to a big audience, at least judging the metrics I can see, a very important topic like personal finance is also prone to condone these shady behaviours.
Why Serena Williams, the best tennis player ever, would need a coach to teach her how to play tennis at a later stage of her career? With her father on her side, she won the US Open, why would she need a different coach? Why did she accept to settle with a guy that did not even manage to be a tennis pro himself?
It is not easy, at least it was not for me, to understand the value of being coached. Competence aside, it is very hard to judge ourselves correctly, acknowledge progress and identify instances where we can push harder. One of the main characters in the series Billions is the hedge fund in-house therapist: I was so curious to see what type of role they would have, since in my mind I could not think of a type who could bring value to guys that are already at the top of their game. The episodes, and the interviews with the real person the character is based on, clarified a lot to me.
As in many areas, there is a big polarisation on the topic: some view coaching as a total waste of time and money, while others consider it essential to overcome limitations that are inherited in each of us.
But here comes the really funny part. If you watch the videos where he comments on his trading performance, his trading strategy is LESS risky than the stock market! He never has a losing year and drawdowns last at max for a few months. Stocks can be down for bloody decades. His strategy not only trunches stocks in returns but also in risk-adjusted returns. If he had any knowledge of risk management, he should move out of stocks and into his strategy, not the other way around!
Changing the time frame of your strategy is only going to change the stress pattern, not the overall amount of stress. Trading intraday means peaks of stress during trading hours but also evenings and weekends stress-free. I have been there, I worked on the FX desk for a bank where every evening we were flat. I also managed bond portfolios during the GFC, the Euro crisis, Covid etc. The only thing that changes is the moments when you are stressed vs when you are on the clouds.
When testing a hypothesis using statistics, there are two types of errors a statistician can make. A type I error is when you reject a null hypothesis that is actually true. A type II error is when you accept a null hypothesis that is actually false.
Type I charlatans are the visionaries who are more or less sincere but wind up ruining their investors anyway because they take their ideas to the extreme or fail to account for the unintended consequences of their ideas.
To dig them out of this debt burden, Law proposed a shift from hard currencies such as gold and silver to paper currency. Paper money was rare at the time so to get buy-in from citizens Law set up a system to back that cash with government debt which could be converted into equity shares of a new exploration company.
That exploration venture, the Mississippi Company, was supposed to explore the Louisiana Territory and strike it rich by finding more gold and other precious metals (bringing the whole thing full circle).
Unfortunately, this debt for equity swap was more advantageous for the French government than its citizens. Speculation ran rampant, shares went parabolic and eventually crashed as bubbles are wont to do.
This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.
References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.
The Compound Media, Inc., an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: -disclaimers
A Wealth of Common Sense is a blog that focuses on wealth management, investments, financial markets and investor psychology. I manage portfolios for institutions and individuals at Ritholtz Wealth Management LLC. More about me here. For disclosure information please see here.
LinkedIn and 3rd parties use essential and non-essential cookies to provide, secure, analyze and improve our Services, and to show you relevant ads (including professional and job ads) on and off LinkedIn. Learn more in our Cookie Policy.
If you listen to the enormously popular Gary Vee, then social is the answer to everything. Others promote video as the only way to convince anyone, of anything, and of course both these options have merit.
In my case I noted that the gurus and charlatans that I ended up with, I was attracted to because of a pre-existing emotional hurt. In other words, I appointed them to that role so that I could work on and fix a particular issue that I had. If I would meet the same people today I would never put them on a pedestal. It was actually me that put them there and not they themselves. It always takes two to tango. In other words if we get dis-enchanted with a particular guru/teacher, the main problem is or was actually with ourselves. Why did we get enchanted with them in the first place?
There is a multi-billion dollar guru trade out there (to my knowledge the biggest trade on earth after weapons, oil and drugs) that feeds exactly on that attitude. From my experience of life (and I could be wrong) if you enter any relationship, whether with a guru or a lover, with such an attitude you are bound to get shipwrecked. The attitude here is, I give you all my responsibility and you fix all my problems. Will such a lop-sided relationship ever work or are you bound to become disenchanted and disillusioned? Is it not that you are setting up such a relationship because deep down you want to become disillusioned and disenchanted? I certainly did and eventually through painful experiences found that I myself needed to take responsibility for my own enchantment.
The first step to healing then is that we withdraw our projection that we will find that one person who in a god-like fashion will lead us through the pearly gates. This is similar to taking back the projection that you will meet that one soul mate that will make you whole. This myth is one of the causes why so many of our relationships fail. Nobody signed up to make you whole, not a lover and not a guru. It is something that you must find in yourself. By finding wholeness within yourself you can then share that love with another person. Similarly, the spiritual teacher can (hopefully) show you the way to freedom within. But it is you who has to walk it and you (using the techniques taught by the teacher) will have to initiate yourself.
Another example is Jewish psychiatrist Victor Frankl who, writing about his experiences at Auschwitz, found that many occurrences in our lives are completely outside of our control. What is within our control is how we interpret them; how we frame them and the meaning we give to them.
In case of abuse at the hand of a spiritual authority it is paramount that you do not frame the experience in a way that disempowers you. Being able to forgive can create healing for both yourself and the perpetrator (a jail sentence might indeed provide further help). In the end we need to realize that any abuse, torture or humiliation cannot reach our innermost, the true self, and it is this that our cultural heroes like Frankl, Mandela or Gandhi have confirmed.
A couple of weeks ago, I received a text from my aunt that included a link to a physician-created YouTube video about the COVID vaccine. The creator has built her fame and fortune as an anti-vaccination proponent. Knowing that her videos are rubbish, I ignored the text.
An infamous example of this is during the 1950s, when the first polio vaccines were being rolled out. Cutter Laboratories was one company among five which produced the polio vaccine. One lot from Cutter contained a live poliovirus. The result was that some children were paralyzed, and some died from being inadvertently infected by the vaccine.
Compared to other advanced countries, U.S. 15-year-olds scored 24th in science on the Programme for International Student Assessment test in 2015 (the most recent report for this test). There are many different definitions of science literacy.
We should engage them in conversations about the successes and failures of past scientists, how many inventions and discoveries were the result of months or years of hard work, and how ultimately, we are better off as a civilization because of these achievements. If the next generation comprehends the complexity and accessibility of science, they will be more likely to respect and trust it. That way, when the next pandemic comes along, with its band of charlatans and profiteers behind it, our citizens will know better than to throw their proverbial pitchers out the window.
c80f0f1006