Make Millions Selling Fear

I don’t have many quality “stock of the day” case studies to provide due to the recent action in the market. My market research has been spitting out very little in the way of opportunity so I am currently holding several partial positions and an increasing cash position (from sells last week). My research is still telling me that most of the opportunities are too far extended to take an ideal risk to reward position so I will continue to write about the subject of fear.

I spoke about the fear of losing money yesterday and want to extend that into the fear that the media creates, specifically book authors. I am going to repost an edited version of an article I wrote last year for many of the newer readers of the blog.

See these links for the originals:
Baby Boomer Bust is BULL
‘Crisis Authors’ feed on people’s Fears!

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Authors and their sheep followers continue to predict coming great depressions, stock market crashes and real estate busts. I am not saying that it can’t happen but their readers sure make them rich by eating up most of their negative crap.

What happened to the predictions from the books in the late 1970’s and early 1980’s? Glance at the book titles from the 1970’s and 1980’s and then read the book titles from today (several listed below). Are you seeing a pattern?

I didn’t go back to the 50’s or 60’s but I know I could find similar titles and probably many more in the 1930’s. My point is: don’t believe everything you read and stop panicking by reading books from theorists (talkers, not doers). I give credit to many of the 1970’s and 1980’s books listed below to Martin Schwartz and his book Pit Bull as he calls them out in a great chapter. I highly recommend his book Pit Bull as it is a great summer read while at the beach or pool.

Theorists make money selling books that sell fear while investors and entrepreneurs make money by following their ideas hedging against a possible crisis. I aim to learn from history and history shows us that these “crisis” books will always sell during tough times. Readers eat up this garbage because most people are trapped in the rat race working their asses off just trying to stay afloat. Their attitudes are typically piss-poor and they love to read about negative events that may be catastrophic (especially a crash that may hurt others).

Also notice how the same authors try to write books when the market starts to go back up again. For example, Howard J Ruff was writing about the crisis in 1979 through 1982 but then started to write about how to invest as a serious investor in 1987. Guess what: he was on the wrong end of the crisis in 1982 (the tail end) and the wrong end of the boom in 1987 (crash later that year). These “fools” are always late to the party and sell millions of books to the “average” person that engrosses themselves in fear! Fear is just another word for a negative mental attitude. Success and opportunities will not gravitate toward the individual that is consumed with fear.

These people, both now and then are not very accurate, they sell garbage in my opinion and I ignore it at all costs! I just hope many of you can do the same and make decisions based on what “YOU” see and not based on book sellers! Invest for now and ignore the garbage but be prepared for a possible crisis. Take necessary steps but don’t radically change your life based upon the writings of a few authors that probably don’t invest themselves. They typically make a living selling books, not the plans and systems they claimed to have used while acquiring great wealth.

Before I get to the examples, I want to stress that I am not saying that a crisis can’t happen in modern America because it can. The dollar is depreciating, debt is mounting and the baby boomers are headed for retirement but this scenario has taken place in the past both in America and in other civilizations. It may not be the exact same situation but the point is to take care of your own business and investments and beware of the crisis authors. They sell fear and are great at what they do because a sucker is born every minute. Don’t be that sucker!

Books from the Past:

  • Crisis Investing: Opportunities and Profits in the Coming Great Depression by Douglas Casey (Hardcover – Jul 1980)
  • Crisis Investing for the Rest of the 90’s by Douglas Casey (Hardcover – Oct 1993) – WOW was this wrong in 1993!
  • What the smart money is betting on in 1985: By Doug Casey by Douglas R Casey (Unknown Binding – Jan 1, 1985)
  • The Coming Currency Collapse and What You Can Do About It by Jerome F. Smith (Hardcover – Sep 1980)
  • Profits from silver by Jerome F Smith (Unknown Binding – 1983)
  • How you can profit from the coming devaluation by Harry Browne (Unknown Binding – 1970)
  • You can profit from a monetary crisis by Harry Browne (Unknown Binding – Jan 1, 1975)
  • How to Prosper During the Coming Bad Years – A Crash Course on Personal and Financial Survival by Howard J. Ruff (Mass Market Paperback – 1979)
  • How to Prosper in the Coming Bad Years by Howard J. Ruff (Mass Market Paperback – Jul 1981)
  • Making money: Winning the battle for middle-class financial success by Howard J Ruff (Paperback – 1986)
  • Howard Ruff’s crash course for the serious investor by Howard J Ruff (Unknown Binding – Jan 1, 1987)
  • How to Prosper During the Coming Bad Years by Howard J. Ruff (Paperback – April 1984)

Books from Today:

  • The Coming Collapse of the Dollar and How to Profit from It : Make a Fortune by Investing in Gold and Other Hard Assets by James Turk and John Rubino (Hardcover – Dec 28, 2004)
  • The Coming Economic Collapse : How You Can Thrive When Oil Costs $200 a Barrel by Stephen Leeb and Glen Strathy (Hardcover – Feb 21, 2006)
  • Defying the Market: Profiting in the Turbulent Post-Technology Market Boom by Stephen Leeb and Donna Leeb (Hardcover – Jun 3, 1999)
  • Empire of Debt : The Rise of an Epic Financial Crisis (Hardcover) by William Bonner, Addison Wiggin (November 11, 2005)
  • The Great Bust Ahead: The Greatest Depression in American and UK History is Just Several Short Years Away. This is your Concise Reference Guide to Understanding Why and How Best to Survive It (Paperback) by Daniel A. Arnold (November 25, 2002)

Comments

  1. Hi Chris,

    Could not agree more. It is hard to believe that most of the time, the people that have voice are exactly those that do not play for real in the market.

    I have been out of this crap for a while and it still impress me how the average investor is so hungry for someone to tell them what to do, that little secret that he is missing in order to achieve success.

    The survivors are always those who take full responsibility for their actions, being it bad or good.

    Great article. lol 🙂

    []s

  2. Michael Hutch says:

    No doubt, the fear factor is real. Fear of losing is a much stronger emotion than greed. What I don’t understand is how people fail to sell when losses are small. If they are so afraid, I would think they’d want to sell quickly. I know I sure do. I have tons of small losses. So many it seems tragic. But I am afraid of losing even more.

    It’s not just being wrong that hurts, it actually feels unfair. Especially when the market rallies after you’ve hit your stop. Not only does it seem unfair, it feels like you’ve been robbed.

  3. Er, of course people who try to predict anything are usually on the wrong end. The reason is because we are not in control of the macro environment but we are in command (hopefully) of our micro environment.

    Now a not-so-famous multi-millionaire taught me a strategy that he developed after reading the late Harry Browne and the late Jerome Smith. He even worked for Jerome when he was in his early 20s. But you cannot deny the run up of oil gold and silver…and the continuing devaluation of the USD. So while you might not follow the writers you list you can still learn something and turn a profit based on your own acuity.

    Of course, if you were to study marketing you would see that the fear of loss out sells the pleasure of gain—so of course the writers play to the fears.

    Anyway, the one strategy I learned from that multi-millionaire has allowed me to begin to prosper in ways I would have never known about had he not first read Browne and Smith. Interesting…

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