The Blogosphere. Finding the Truth

I find surfing the Internet to be an emotional experience.  I enter investing forums, looking to continue earlier conversations or to find a rookie's question to answer.  Every once in awhile  I come across angry people who post insulting replies to beginners who are eager to learn.  Why would anyone do that?  Someone comes for help and these angry souls bash them for not knowing the answers to simple questions.  I find that to be very upsetting.

Happily, the majority of posters are helpful.

Currently someone is nastily criticizing me for teaching people to understand how options work, when he believes I should be teaching them to trade and make money.  He has no clue that by understanding, the trader is well placed to earn that money on his/her own.

As part of my surfing, I visit many blogs.  The blogosphere is becoming more relevant in our lives, because there are fantastic bloggers who provide outstanding opinion and analysis.  Left wing, right wing, moderate – take your pick and you can find someone who has the ability to discuss politics in a rational manner – without anger or name-calling.  Of course, there are also the angry, mean-spirited bloggers.  I don't know what purpose they serve, other than to increase their own visibility.

As the newspaper business is sadly fading, there is an ever-increasing need for news sources and commentary.  Bloggers are filling the void.  The quality of those blogs ranges from outstanding to pathetic. 

Many are blogs written with good intentions, but filled with misleading information.  And that's as true in the investment arena as anywhere else.

Among my pet peeves are blogs that sell trading systems. Some make reasonable claims and some even provide documented (independent audit) of results.  But, most make absurd  claims, seeking to be paid large fees by the ignorant.  And, as P.T. Barnum said: "There's a fool born every minute." 

Barnum

Via e-mail, I've
been in touch with someone who is literally down to his last few thousand
dollars and has reached retirement age.  He currently spends his cash on lessons and
trading systems, looking, in vain, for a magic way to provide for his retirement.  It's
too late.  He cannot be saved.  It hurts that this man is throwing away his little remaining reserves on an impossible dream.

I see too many bloggers telling readers that (for a fee) they can learn to have an 85% or 90% success rate with an income generating strategy.  And if that's not enough, the claim is that it's easy to generate 10% per month, on a consistent basis.  Of course these are not among the audited sites and the careless reader sends in the money and finds that the story is nothing more than selling far OTM put and call spreads – the iron condor strategy. 

It is not possible to earn 10% per month with an 85% success rate.  It's all a pack of lies.  What I, and other reputable bloggers are trying to do is educate, entertain, and spread information that should be helpful to readers.  Our intention is to help you avoid big mistakes, take a reasonable path when trading, and come out ahead of the game.

Can you imagine that someone who can earn 10% month after month would tell anyone the secret?  Earning 10% per month multiplies your investment by a factor of 10 in just two years.  $1,000 becomes one million in just 6 years (and one month), and one billion in 12 years (+ two months).  Who would sell that information?  No one.  But the gullible buy it.

Here, at Options for Rookies, my objective is to show you how to use a fantastic risk reducing investment tool, the option.  And the rest is up to you.  I'll continue to discuss trading ideas, strategies and reply to questions.  

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14 Responses to The Blogosphere. Finding the Truth

  1. John Forman 09/16/2009 at 8:57 AM #

    Mark,
    In need of a good rant on the subject of poor forum decorum a while back I posted http://www.theessentialsoftrading.com/Blog/index.php/2008/08/06/trading-forum-discussion-lets-keep-it-civil/. It really is sad how a good medium for exchange can be so quickly sidetracked.
    As for the rest of your post, sounds like stuff that could go into the FAQ, like for the question about how much one could make or how to avoid scams. 🙂
    John

  2. Mark Wolfinger 09/16/2009 at 9:21 AM #

    Sad indeed.
    Good suggestion on FAQ

  3. Fran 09/16/2009 at 9:50 AM #

    Hi Mark,
    I agree: selling otm options strategies is a wide place for heartless trading systems sellers. Like options lovers, this is our hard, ugly and harsh reality.
    Always a pleasure read you.
    Regards from Spain.
    Fran, a naked options seller 🙂

  4. Mark Wolfinger 09/16/2009 at 10:14 AM #

    Fran,
    In any business there are always low-lives. But options already have a negative image and I hate seeing it made worse.
    Thanks,
    Mark

  5. Barry Ritholtz 09/16/2009 at 2:51 PM #

    Telling readers you have a tool that might be of utility if they learn to use it properly, and integrate it with other valuation/analytical methods and risk management approaches isn’t sexy, and doesn’t sell.
    But screaming you can turn people into millionaires? That has always been a winning strategy for selling to rubes

  6. Mark Wolfinger 09/16/2009 at 3:06 PM #

    Thanks Barry (I’m a big fan),
    I guess my integrity and I will just have to do without making those sales. Even though those rubes need what I quietly offer, and they need it badly.

  7. Donald 09/16/2009 at 6:27 PM #

    Keep reading your articles. Hope it all will sink into my hard head. Thanks.

  8. Manshu 09/16/2009 at 7:53 PM #

    It amazes me how easily people criticize others who don’t seem to agree with them (on the web). And I am not even talking about trolls. I wonder if its just because they are anonymous or because they are just that ill mannered.

  9. Mark Wolfinger 09/16/2009 at 8:44 PM #

    Donald,
    A lot of it is experience and believing that what you have learned is really true.
    I did not do as well as I should have over recent times. Disappointing.

  10. Mark Wolfinger 09/16/2009 at 8:46 PM #

    Me too.
    It’s so difficult to decide what motivates such people. I suppose it’s best to ignore them. Trolls feed on attention.

  11. JB 09/16/2009 at 10:19 PM #

    Hi Mark,
    “post insulting replies” ala Monkey.
    Keep doing your good work. Please.
    All the best.
    JB

  12. Mark Wolfinger 09/17/2009 at 7:32 AM #

    Yes, Monkey. Is he still around?

  13. JB 09/17/2009 at 10:40 PM #

    Monkey finally left Yahoo and appeared, for a short while, on ET. I haven’t seen any posts from him for probably a month or so. Thank goodness. He certainly destroyed the Yahoo board.
    All the best to you.
    JB

  14. Mark Wolfinger 09/17/2009 at 11:02 PM #

    I set him on ignore at ET, so can never be certain if he still lurks. What a wasted life.