Annual Fraud PSA (Part 2)

As part of my annual discussion on fraud, today I continue my analysis of ChangeWave Investing.

I next started to research Jon Najarian, a character I’ve seen, heard, and read many times online over the last 10+ years:

     > Jon Najarian is the founder of InsideOptions.com, and editor of
     > ChangeWave Options Trader (ChangeWave.com)…

Being linked with an entity linked with a fraud is enough to get me to run the other way. As I said last time, I generally think people deserve second chances but not when it comes to my hard-earned money. I strongly advise you adopt the same outlook. Let these people get their second chances with jobs carrying less fiscal responsibility.

     > About ChangeWave Options Trader
     >
     > ChangeWave Options Trader is a weekly advisory newsletter service…
     > Jon Najarian and the ChangeWave Research Alliance’s goal is to deliver:
     >
     > Trades that are successful 75%-80% of the time…
     > Winners that deliver 65%-75% gains as a regular course…

If it sounds too good (e.g. consistent 65%-75% gains) to be true then it probably is.

     > A few 200%-300% winners

Claims of extremely outsized performance are red flags. Most aren’t real.

     > ChangeWave Options Trader helps subscribers multiply profits as much
     > as tenfold, making one to two trades each week, and at the same time

“Multiply profits as much as tenfold” is a claim of outsized performance. Don’t believe it.

     > slash the risk factor with their “Pro’s Edge” trading strategy. They

Proprietary names of services/features that sound technically advanced or secretive are red flags. On many occasions, I have found little actual content behind these titles.

     > help subscribers avoid mistakes that trap most amateur options
     > investors, by using options the way that pros do.

Out of curiosity, I then poked around to learn more about this website I had stumbled upon:

     > The “wonderful” results of most systems are often the result of
     > computer modeling and the ability to pick the best curve to make
     > the retrospective data appear the most positive. When followed
     > prospectively, many of these models perform much more poorly.

I completely agree! I was intrigued.

     > What makes GetFolio different?

Claims of being different (or unique) are potential red flags characteristic of many sales pitches. By this point in history, I don’t think much in the way of genius or innovation exists with regard to successful investing. Commitment, above all else, is what’s required and what so often seems to be missing.

     > The GetFolio.com system was developed and tested, using real
     > money on thousands of stocks in both bear and bull markets…

I’m leery of that claim. I doubt they could substantiate real money trades on thousands of stocks in different market environments. That would require quite a bit of capital and an impressive feat of documentation.

I will continue next time.