About a week ago I saw a infomercial for a free seminar entitled Teach Me To Trade. I went to their website, and signed up. I love these free seminars. Last night I went to the seminar which started at 6pm at a local hotel. Knowing I might not have a chance to eat for a while, I stopped at McDonalds, and grabbed a quick burger. The hotel had parking, but it cost $7. The heck with that. I parked at the parking lot near the library which would cost a maximum of $4, and was only a couple block walk.
I arrived at about 5:40pm, but the doors were open. There was a registration table, but the only people there were attendees. There was a sign on the table saying that audio or video recording was not allowed (supposedly due to copyright). But that always make me think that they don’t want people to have evidence that might be presented in court about promises or representations that had been made before people plunked down their money. There was a sign by the door that said the room was reserved for “Whitney Education Seminar 11am-11pm”. Whitney Education? Was this seminar tied to Russ Whitney who puts on real estate seminars?
Once inside, the Teach Me To Trade “training” began. Actually there was very little “training”…more of a sales pitch. The main speaker Andy Tanner was introduced. He was a tall friendly kind of guy. An out-of-shape ex-basketball player who apparently now owns some snowmobile dealerships.
He started off talking about goals, and risk, and quickly moved into talking about retirement. He talked about problems with social security, and pension plans. SCARE TACTICS! He told us about his own start in investing buying mutual funds. He bought different funds including the New Perspective Fund, and the Janus Mercury Fund. He later found they were basically the same as the S&P 500, and NASDAQ index funds, except more expensive. Interesting the graphs he showed of various funds were from around 2001-2002 showing the values go up, and then back down, maybe trying to plant a subliminal suggestion that you will not make any money in funds. He pointed out that investment companies are looking out for themselves and not for their investors. He suggested that if you are paying investment companies to pick stocks for funds, that they should pick stocks that wont go down. [Ummmm…almost all stocks went down around 2001-2002…it happens.]
He trashed on 401k plans, and returned to the fact that pension plans are going away. He spent a significant amount of time trashing institutions, suggesting that individual investors can do better.
He showed so more graphs of individual companies (including Enron) from around 2001-2002 showing the stocks tanking, and questioning why the institutions would have bought such companies. He then brought the fact that most funds don’t even beat the market.
There were some quotes from Peter Lynch, and Warren Buffet suggesting individuals can do better than the big funds. He doesn’t mention that neither of these guys advocates STOCK TRADING! Both of these guys advocate buying stocks in solid companies and HOLDING them!
Then he showed some example where someone invests $1000 into a fund at a young age, and holds it for 65 years. The fund supposedly returns 8% (kind of low since the market has averaged about 10% in the long run). He ends up making a lot of money. But the fund company charges him 2.5% for expenses. (2.5%? Who charges that much? Why not buy an index fund that returns 10%, and charges around .25%?) Anyway, supposedly that drops his earnings to 5.5%. But somehow the investment company manages to make more money with their 2.5% fees, than he does with his 5.5% returns. I never figured out the math behind that.

Continued in part 2