Wall Street Nonsense

The bulls run wild on Wall Street, waiting for you to slosh through their thick trail of bullshit. That's how it's always been; but the economic meltdown of 2007-2009, brought on by the greed of the investment world's elite players, has opened Wall Street's kimono and the sight is not pretty.

 

ING is running a series of television commercials and print ads touting the concept that everyone has a "Number" that they carry around with them and that will ensure their happiness. ING is not alone in perpetuating this nonsense. Instead of fixating on a number, individuals need to focus on their income needs and sources of income in retirement. It's not the size of the nest egg that matters, it's how well it supports your needs in generating a lifetime income stream.

"Get Rich Quick" usually means "Lose Money Fast." These kinds of ads are all over the web -- including reputable sites like CNBC.com. Before you click, ask yourself why someone who was earning 15%-25% annually would want to share the wealth with you and why someone who gained 2550% on a single stock pick needs to sell a newsletter. The only folks who get rich are the people who run the ads.

On Jan. 7, 2010, Credit Suisse increased its target price on RPM International to $21 up from $15. That same day, RPM was trading around $20.75 so CS was hardly going out on a limb. However, the poor investors who followed the sage advice of Credit Suisse presumaby missed out on $5.75 of appreciation but now have the opportunity to pounce on a measley 25-cents of additional appreciation. Wall Street wizardry at its worst.

Is it coincidental that Peter Schiff, who is a regular guest on CNBC, MSNBC and Fox Business and who always trashes the U.S. stock market while talking up foreign stocks and gold, is President of Euro-Pacific Capital, a company focused solely on selling its clients non-U.S. stocks and gold? Never forget that every talking head is trying to sell something.

 

As of November 1, 2009, the U.S. stock market, as represented by the S&P 500, is 33% below its level on January 1, 2000. This means you would have been better off putting your money under the mattress rather than following Wall Street's mantra that "over the long term, nothing outperforms the stock market." Actually, in the 2000-2009 decade, you would have outperformed the S&P 500 by investing in bonds, real estate, international stocks, commodities, natural resources and emerging markets. That's why you diversify.

 

On October 8, 2009, Goldman Sachs upgraded Northrop Grumman from "Conviction Sell" to "Sell." Is that good or simply less bad?


On September 17, 2009, with Apple stock trading at $184, Bank of America had a "Buy" rating on Apple with a price target of $140. Shouldn't that mean the stock is overvalued and, thus, a sell?


71% of respondents in a February 2009 Harris poll believe "most people on Wall Street would be willing to break the law if they believed they could make a lot of money and get away with it."