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Book Review: "How To Become a Professional Con Artist"
Dennis Marlock opens his "How To" book with a testimonial:
As a law professor, I have read countless books, articles, and dissertations on fraud and deception. This, however, is the first time I have elected to endorse any author's work. The book is indeed an academic gem worthy of inclusion in university curriculums throughout the nation.
The beautiful thing about the professor's testimonial and the related, "I first bought the book hoping to discover why a cop would tell people how to commit fraud. Having read the book, I must now ask why he didn't write it sooner" is that they were both short cons written by the author.
The book lacks the scholarship, timelessness, humor and general principles of David Maurer's classic The Big Con, which I would recommend as one of the seven best books for market practitioners right after Ben Green's Horse Trading. Nevertheless, it is replete with cons and techniques we are exposed to in our day-to-day work in the market. The most relevant topic is chapter 4, "Tools of the Trade," which lists such essentials as "How to Talk Without Saying Anything." An example of this would be market talk such as "1040 is a key level." Yes, if it turns at that level and goes up it was key, and if it hits that level and goes below, why that proves that it didn't hold. A variant of this is the "the market is good as long as stays in the 1025-1075 range."
An important sub-technique is to "use abstract and otherwise equivocal and meaningless rhetoric." I have already written about this, and California Phil's precis of the earthquake "professor" is a classic here. But the market confidence man in general does always frame his thoughts in ways that cannot be disproved or refuted.
One loves the discussions of power laws in this context, as there's no way to differentiate a normal distribution from a power law with any degree of confidence for any samples involving 750 observations or less, and by then the situation has changed so much that one can always rely on Oct 19, 1987.
One must always appear confident as a confidence man and "I am completely confident that you will be totally satisfied with this necklace" is a phrase that the confidence man uses often. This is even more effective when you receive this assurance from a friend of the confidence man. I recently read an interview about a large man who has lost billions of dollars for his investors in publicly reported funds, yet the interviewer refers to the millions he has made the 30% a year internal rates of return, and the nine-figure amount that his followers made applying the techniques that the large man proudly boasts he took the lions share of , and the amazing returns he himself is making at the very present time, despite the difficulties he apparently has in making money for customers.
One of my favorite passages in "How to Become a Professional Con Artist" is the depiction of the big businessman as the ideal mark. "They're cows waiting to be milked," Marlock writes. "They are in abundance, they don't complain when being milked, they provide useful products, and they are used and abused by almost everyone. They are abused daily by employees, lawyers, stockholders, customers, suppliers, lenders, accountants, partners, tax collectors, and competitors. except for the stiff competition, bus schemes are the easiest, safest, and most profitable.
It's is interesting to read many of the short cons based on change raising. A simple variant here is "the pot game," played in a bar with a companion.Rule 1: Both players place five dollar bills on the bar.
When the sucker bets $8 you declare him the winner and you collect the $8.
The change-raising con is much more complicated than this and involves about five different transactions guaranteed to confuse a cashier into giving you the store's money. You make a small purchase, ask for change, make an intentional mistake, correct it and while making small talk cheat the store out of $10.
The best way to stop such cons at stores, bars and in your trading is t complete each transaction one at a time. I find that when I change orders before announcements, or start buying when I haven't finished selling, or trade from both sides of the market in the same day, or stop to admonish a colleague or take a call from one of my 80-plus-year-old altekakkers who are the only ones besides kids and wives I'll interrupt a trade for, I am always likely to end up with the short stick.
Finally, the book covers investment schemes, and I find that they are becoming much more prevalent lately. My second-favorite newsweekly, "----- Events," had a classic in this regard recently promising me a triple if I only would buy some Samsung from a newsletter writer who, they confidently assured me, was the top man in many different areas with considerable academic and practical distinction (indeed including serving as pres of a moribund libertarian operation I resigned from when he took over ). Whenever someone offers you more than a risk-free rate, guaranteed, you know you're involved in an "investment scheme (covered in "How to Become a Professional Con Man" right next to the Hispanic Lotto scam, one of my favorites), and get off the elevator or plane or train or newsletter with that personage , immediately.Kim Zussman comments:
One of my favorite passages in "How to Become a Professional Con Artist" is the depiction of the big businessman as the ideal mark. "They're cows waiting to be milked," Marlock writes. "They are in abundance, they don't complain when being milked, they provide useful products, and they are used and abused by almost everyone. They are abused daily by employees, lawyers, stockholders, customers, suppliers, lenders, accountants, partners, tax collectors, and competitors."
As one of the cows waiting to be milked by Mr. Marlock, I like to take a Kris-like view of the true predator-prey relationship here. The aforementioned employees, lawyers, stockholders, et al.,. thicken the skin of the seasoned business owner. We have been sued for no good reason. We have been audited. We have seen employees scam the system. We have been overpromised and underdelivered a thousand times. And yet we not only survive, but thrive. Rate increases, fee increases, skyrocketing health-care costs - it doesn't matter.
As for the con man, we know what to do with such people.
When the con comes calling, you can rest assured we are ready, for we have seen his ilk before. You may be able to fool us once, but no matter what, we'll be back and it won't happen again. Therein lies the key, for there is no repeat business for the con. In fact, I would say that the con is a fool because he goes for the one time score rather than a recurring income. And sooner or later, the con will become the hunted as he will con the wrong person. If you think hit men are scary, try lawyers on the prowl.
As for me, I take a Rearden-style view to the situation. Rates can go through the roof, the economy can go to hell, disaster can strike on all fronts and I'll be here tomorrow - open for business and trading the markets.
Be careful not to milk a bull.
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