Nov

25

Book Review: How To Become a Professional Con Artist
3/25/2005

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.

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