| Kelly Kesner: |
I’m Kelly Kesner with this week’s installment of Investor’s Watchdog University. I’m here with Pat Huddleston, the founder of Investor’s Watchdog, and today we’re talking about an axiom that most people can probably finish if you start it for them. If it sounds too good to be true…
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| Pat Huddleston: |
Yeah, what most people would finish that with is “it probably is”.
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| Kelly Kesner: |
But, you think there’s a problem with that axiom.
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| Pat Huddleston: |
There’s a couple of big problems. First of all, the ‘probably” has no place in that. That “probably” is sort of the crack that so many investment scams get pulled through because people say it, “Probably.” Well, probably isn’t definitely. So, maybe this is the one that really is.
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| Kelly Kesner: |
So, it should start “if it sounds too good to be true”, nothing about that.
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| Pat Huddleston: |
That’s right. The way we say it at Investor’s Watchdog though and this is the way we would encourage people to say it is “if it sounds too good to be true you’re talking to an amateur scam artist. And I’ll tell you what I mean by that. Only really dumb scamsters promise to double your money or promise you something that sounds too good to be true.
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| Kelly Kesner: |
So, that Nigerian e-mail scam that we’re all familiar with or winning the lottery over in London. Those would be examples of that?
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| Pat Huddleston: |
That’s exactly right. The problem there, Kelly, is that people know about those scams. Everybody has heard about the Nigerian e-mail scam. And what tends to happen is people think, “You’re talking about investment fraud, I need to look out for things that look like those Nigerian characters, right?” And what I try to tell people is listen, those people that run that scam flunked Adam’s Scam School. They are the drags at the bottom of the scam artist talent pool. The people you really need to worry about you will never see coming. Most competent scam artist pitch you something that looks to the untrained eye exactly like a legitimate investment.
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| Kelly Kesner: |
So, investment scams look legitimate?
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| Pat Huddleston: |
Yeah. Exactly. What does an investment scam look like to the untrained eye? It looks exactly like a legitimate investment.
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| Kelly Kesner: |
So, does Investor’s Watchdog help alert people to this?
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| Pat Huddleston: |
We do. Yeah. We blog on this every week day. A new investment scam every single week day, which adds up to hundreds every year, obviously it’s thousands that we’ve blogged on the four years that we’ve been doing it now. And the scary thing is on that topic it’s not going to promise you the moon. I have blogged on three Ponzi schemes in the past six months. They promised a whopping five percent. Now, that may be a lot in today’s economy, but five percent is not going to bring that old axiom into play for anybody ’cause it just doesn’t sound too good to be true.
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| Kelly Kesner: |
And I’m sure people are surprised that there are so many scams that you can blog on every day that sounds too good to be true.
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| Kelly Kesner: |
So, investment scams look legitimate?
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| Pat Huddleston: |
No, that’s exactly right. Most people could tell you maybe five, maybe they could fill up two hands, but they couldn’t tell you that there are several every day that Investor’s Watchdog has to choose one from.
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| Kelly Kesner: |
And we’re going to get into some of those in greater detail as this goes on.
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| Pat Huddleston: |
We’re looking forward to that.
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| Kelly Kesner: |
But, right now I guess the take away from this is if it sounds too good to be true, it is too good to be true.
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| Kelly Kesner: |
Well, that’s all the time we have for today. We’ll see you next week. Until then class dismissed.
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