CHAPTER EIGHT: THE GREATER FOOL THEORY, IN REVERSE

[transcript]

Dangerous Don:  Welcome back, everybody!  Welcome back to the MACHO INVESTING blog, the home of you and me and a TON of other stock-market millionaires just like us.  We’re blogging to you direct from our worldwide corporate headquarters right here in Scranton, Pennsylvania.

Johnny:  And I second the motion, even though we’re actually in Dunmore!    Sitting in Don’s kitchen.   Welcome back, everybody!

Dangerous Don:   I’m your host, Dangerous Don.  I’m sure you recognize the name.   I happen to be one of the greatest stock-market investors of all time.

Johnny:   And sitting right here next to me is. . . . . . . .

Dangerous Don:   . . . . . and sitting right here next to me is the distinguished co-host of this blog, and the dean of the Scranton. . . .

Johnny:   Dunmore.

Dangerous Don:  . . . . . the dean of the Dunmore financial gurus, Johnny Doorknob!

Johnny:  Pleasure to be here, as always!

Dangerous Don:   So. . . . . Johnny. . . . little bit of personal news, before we start.   How’s your new grandson?

Johnny:  Ryan!  What a pistol!  Smiles at everybody!

Dangerous Don:  How old?

Johnny:   Three weeks!

Dangerous Don:   He's reading the Wall Street Journal already, I’m sure.

Johnny:   Funny you should mention reading.  My daughter asked me about that too.

Dangerous Don:  Really?

Johnny:   I think I told you this.   My daughter Cindy taught my little granddaughter Cathy how to read before she was four years old.    But. . . . now. . . . Cindy isn’t sure whether little Ryan is going to be able to learn that fast.

Dangerous Don:  Ahhh. . . .

Johnny:  So I said to Cindy. . . . . Don’t worry!   In fact. . . . . I said. . . . . from one way of looking at it, Ryan can read already.

Dangerous Don:   Already?  At three weeks?

Johnny:  His DNA.  The DNA in your body can read 64 words.  Each word, 3-letters long.

Dangerous Don:  No kidding.

Johnny:  They call them “codons”.  Three chemicals attached together, in kind of a string.

Dangerous Don:  Hmm. . . . . .

Johnny:  Crazy thing is that the order of these chemicals is important.   DNA can tell the difference between the codon CAC and the codon ACC. 

Dangerous Don:  And. . . . . ?

Johnny:  Different instructions.  Different commands.  The DNA does different things, as it reads each codon.

Dangerous Don:   So. . . . . wait a minute. . . . . my DNA is actually “reading”?  Like, reading a book?

Johnny:   Absolutely!   This is reading.   Knowing 64 words with 3 letters each is reading.   And knowing the difference between CAC and ACC.   That’s reading.   Reading at a first-grade level, for sure.

Dangerous Don:  So. . . . even a three-week-old kid knows how to read?

Johnny:  Every cell in his body is reading all the time.

Dangerous Don:  Johnny, you never cease to amaze me.  The things you come up with!

Johnny:   But, we got to get back to business!  We’re here to talk about investing and stuff.

Dangerous Don:  Correcto, my friend!  This is the MACHO INVESTING blog, and those good folks out there are waiting for our take on what’s going on in the investing world.

Johnny:  Biggest news, in my opinion, is that trading volume is way down.  Average daily trading volume, in all US stocks, is down 50% from 2008.

Dangerous Don:   Not a big deal.   In my opinion.   Main thing is, stock prices are up.  S&P 500 is up. . . . heck, it’s more than double where it was in March, 2009.

Johnny:  Okay.   But if there are fewer and fewer buyers in the market, sooner or later we’re heading for one of those Emperor’s New Clothes moments.

Dangerous Don:  Meaning. . . . ?

Johnny:  People start asking themselves. . . . . well, what actually keeps these stock prices up?

Dangerous Don:  Obvious.  Earnings.

Johnny:  But the companies everybody wants to invest in don’t pay any dividends.   Sure, they have earnings.  Some of them have lots of earnings.   But you, the share-holder, you don’t get any of those earnings.  Google has never declared a dividend in its entire corporate history.

Dangerous Don:   Point being. . . . ?

Johnny:   Owning a share of non-dividend-paying stock doesn’t put any food on your table.  Any more than owning a baseball card does.   It’s only valuable because you’re pretty sure somebody down the road will buy that share from you at more than what you paid.

Dangerous Don:   And somebody always will!

Johnny:  That’s called “The Greater Fool Theory”.   You buy something, and you know that it ain’t going to put any food on your table.    But you buy it anyway, because you’re sure somebody else. . . .  some Greater Fool. . . .  will buy it from you, at a higher price.

Dangerous Don:  That’s right!

Johnny:  Thing is. . . . the whole market for non-dividend-paying stocks is nothing more than a glorified version of the Greater Fool Theory.

Dangerous Don:   Tell that to the hundred million people who bought stocks last year.

Johnny:   Bonds pay you interest.  CD’s pay you interest.  And some companies pay you dividends.  All that means real food on the table.

Dangerous Don:   But you’ll always make more on the stock market.  More than bonds.  And really, really more than CD’s.

Johnny:  But non-dividend-paying stocks pay you nothing.  You’re only going to get back your investment by selling.

Dangerous Don:  Google is a strong BUY, at least in my shop!

Johnny:  A share of Google is only worth what the next guy is willing to pay for it.  And somehow, you have to convince that next guy to ignore the fact that Google stock isn’t going to put any food on his table either.

Dangerous Don:  That’s the whole idea of the stock market.  And it rolls along nicely. . . .

Johnny:  And it all rolls along nicely. . . . until it doesn't.   Until we reach that Emperor's New Clothes Moment.   What's going to happen. . . . gradually, people will start paying more and more attention to this news about declining trading volume. 

Dangerous Don:  And. . . . . ?

Johnny:  And then. . . . one day. . . . investors will wake up and realize they're trapped.   There ain’t enough Greater Fools out there anymore, to do all the buying that has to be done.

Dangerous Don:  Don’t make me laugh!   We’re never going to run out of fools!

Johnny:   Okay.   You’re right.  The world will never run out of fools.    But not all of those fools will have the cash to buy 1000 shares of Google stock.   Not at $600 a share.

Dangerous Don:  Don’t worry!  More than enough fools to go around!

Johnny:  I think. . . . one day. . . . we’re going to see the Greater Fool Theory start to operate in reverse.   People are suddenly going to realize what worthless pieces of paper non-dividend-paying stocks really are, and how buyers seem to be getting fewer and fewer, and how likely they are to get stuck. . . .

Dangerous Don:  And. . . . . ?

Johnny:  And everybody is going to head for the door at the same time.   Prices will drop like rocks.

Dangerous Don:   So. . . . that’s it?. . . . the End of the World, right?

Johnny:   All of a sudden, you figure it all out.   You finally understand what keeps stock prices up.   Future buyers.    That's the only thing keeping stock prices up.  There's this myth that there's always going to be an endless supply of future buyers.   Always buying at higher and higher prices.  But right now. . . . . problem is. . . . . buyers seem to be disappearing.

Dangerous Don:  And the oceans will start boiling, and the Moon will crash into the Earth, right?

Johnny:   You know. . . . lack of confidence is contagious.   And it’s self-reinforcing.   The main reason you start selling is because you’re afraid everybody else is going to sell.   When that happens. . . . the market nose-dives.

Dangerous Don:  Gimme a break!

Johnny:  We’ve gone through this whole mess twice, just in the last eleven years.   The Crash of 2001 and the Crash of 2009.   People remember.

Dangerous Don:  What’s the odds of that kind of crash happening again, so soon?

Johnny:  Most people. . . .  deep in their gut. . . . . would bet there’s going to be another stock market crash within the next five or six years or so.

Dangerous Don:   You doom-and-gloom guys always talk a good line. . . . .

Johnny:  That’s why the drop in trading volume is going to spook a lot of folks.

Dangerous Don:   . . . . . but the market always recovers, despite what you guys say.

Johnny:   I’m sure the market will eventually recover.   But only when companies start paying hefty dividends.   Owning stock should actually put food on your table.  Without having to sell the stock.

Dangerous Don:  Never heard of . . . . .

Johnny:  Actually, that’s the way things used to be.   Not so long ago.   Most companies used to pay cash dividends on their stock, at yields higher than their own bonds.

Dangerous Don:  Before my time.

Johnny:   It was only in the 1950’s. . . . that’s when companies saw they could get away with not paying dividends.   Because investors seemed more focused on capital appreciation.   That was a dumb move by investors, by the way, to let companies get away with eliminating dividends.

Dangerous Don:   Enough about stocks already.  Bonds have all these same problems.

Johnny:    No they don't.    Bonds don't depend on other people wanting to buy them.   But you have to be patient, because bonds are all about time.   Remember, you always have the option to hold on to your bonds. . . . . hold them to maturity. . . . . and collect every penny you invested, plus interest.

Dangerous Don:  Enough of this doom and gloom.  We’re gonna have to move on to a new topic.

Johnny:   Okey-dokey.

Dangerous Don:   Hired a quant to do the math on the Hemline Index.

Johnny:   Wait a minute. . . . . Hemline Index?   You mean. . . . . that crazy old superstition?  About stock prices going up when women’s dresses. . . . . ?

Dangerous Don:   It is NOT a superstition!   We’re talking rock-solid regression analysis!  Mathematically-proven correlation!   Heck, even Wikipedia says it's valid!

Johnny:   You know, Don. . . . sometimes. . . . I don’t know whether you’re joking or not.

Dangerous Don:  My staff constantly monitors the fashion world, to check whether the hemlines on women’s dresses are going up or down.   Including finding out what the fashion gurus are predicting for the next five years, hemline-wise.

Johnny:   Amazing.  Do all 401(k)’s operate this way?

Dangerous Don:   Then, my staff pulls together all these hemline numbers, together with all other relevant economic factors such as interest rates, inflation, commodity prices, etc., etc., to develop a comprehensive stock-market strategy.

Johnny:  Good lord.

Dangerous Don:   I’m a fiduciary.  I have to be as thorough as possible.

Johnny:  Of course.

Dangerous Don:  And yes, I belong to an association of 401(k) investment advisors, and yes, our whole association agrees that these important scientific metrics, like the Hemline Index. . . . . which are  mathematically-proven metrics, not superstitions. . . . these have to be the core of any investment strategy.

Johnny:  Of course.

Dangerous Don:  The math is the whole thing.  That’s why I hired the quant.  It’s not just a simple matter of dresses going up and going down.  Much more complicated.   You gotta ask. . . . how many inches of “up” in the hemlines equals how much adjustment in the total Value-at-Risk of your equity portfolio?   What's the delta?   That’s the key!

Johnny:   Okay, but. . . . . this is 401(k) money, right?   These employees are saving up for their retirement, right?

Dangerous Don:  And the math is only the first step.

Johnny:   Ahhh. . . . hate to even ask. . . . . .

Dangerous Don:  We’ve also hired a lobbying firm, to lobby the fashion industry.  We are making sure they understand that an upbeat stock market is good for everybody.  And for that to happen, we need upbeat hemlines.

Johnny:   Wow!   You guys really work hard!    So if you can convince the fashion gurus to raise hemlines. . . . . ?

Dangerous Don:  The S&P 500 will just go through the roof!

Johnny:   Amazing!   But, actually. . . . hate to say this, Don. . . . . but. . . . on that upbeat note. . . .

Dangerous Don:   It’s time?

Johnny:   Afraid so.

Dangerous Don:   Always seems so quick!   Folks, sorry but it looks like we’ve run out of time!   Hope you learned a lot! 

Johnny:  Before we go, what's the take-away?

Dangerous Don:  Same thing I've been saying for years.  What all the textbooks on finance will tell you.   RISK EQUALS REWARD.   So, obviously, MORE RISK EQUALS MORE REWARD!

Johnny:   That's completely nuts!   But we're out of time.  We gotta go.

Dangerous Don:  See you next time!

Johnny:  See you next time!

Dangerous Don:   Stay tuned to the MACHO INVESTING blog!    Believe me, you are going to make a TON of money!

CHAPTER SEVEN: KOSCOT INTERPLANETARY

[transcript]

Dangerous Don:  Welcome back everybody!  Welcome back to the MACHO INVESTING blog, the home of you and me and many, many other stock-market millionaires.  We’re blogging to you direct from our worldwide corporate headquarters in Scranton, Pennsylvania.

Johnny:  Welcome  back, everybody!

Dangerous Don:  I’m your host, Dangerous Don.   I’m sure everybody recognizes the name.   I happen to be one of the most successful stock-market investors of all time. . . .

Johnny:  And this is our co-host. . . .

Dangerous Don:  . . . . . and this is my very distinguished and always level-headed co-host, Johnny Doorknob.    The Numero Uno, go-to guy in the Scranton financial community.

Johnny:  Thanks, Don!   So. . . . what’s your hot stock tip for this week?

Dangerous Don:   Johnny, two words.   Koscot Interplanetary.

Johnny:   Ahhh. . . . . okay. . . . . so, lemme guess.   Some kind of science fiction movie?   Maybe a spaceship?

Dangerous Don:   Hottest stock in the market today.

Johnny:   So. . . . . like. . . . . it’s a home run?

Dangerous Don:  You been living under a rock the last six months?

Johnny:  Okay, so. . . . . what do they do?  What do they make?

Dangerous Don:   They repair umbrellas.  Actually, they franchise umbrella-repair shops.  Fastest growing business in the world today.

Johnny:  Wow!

Dangerous Don:  Each franchisee lines up more sub-franchisees, and the business just keeps on growing and growing.  The stock is a little pricey at seventy times earnings.  Buy it on the dip.

Johnny:   So. . . . lemme guess.  Each sub-franchisee then turns around, and lines up more and more sub-sub-franchisees.

Dangerous Don:  How did you know that?

Johnny:   Don, this whole thing is suspicious. . . . .

Dangerous Don:   Not at all.

Johnny:   Sounds like a classic pyramid scheme.

Dangerous Don:   Listen, if you buy the stock, make sure you mention my name.

Johnny:  Why?

Dangerous Don:  Investment professional.  I get a small commission.

Johnny:   A kickback?

Dangerous Don:  We call it revenue sharing.

Johnny:  What about that 401(k) that you’re now in charge of?  You plan to recommend this stock to the employees?

Dangerous Don:   Already have!   Johnny, I couldn’t sleep at night if I kept quiet about deals like this!

Johnny:   Deals like this?   Oh boy!

Dangerous Don:  Besides, I’m a fiduciary.   I can’t let my guys miss out on opportunities this big!

Johnny:   Of course not.   But how about that revenue sharing?   You get a commission when the employees in the 401(k) buy this stock?

Dangerous Don:   Standard operating procedure.   Standard 12b-1 fees.   Everything we do is technically legal.   No 401(k) on Earth operates any differently.

Johnny:  This whole business of hidden fees in 401(k)’s is a volcano waiting to erupt.

Dangerous Don:   Think so?

Johnny:   Actually, the 12b-1 fees and the revenue-sharing are just the tip of the iceberg.  There are ten or fifteen other kinds of fees that 401(k)’s charge, half of which nobody has ever heard of.  Hard to even keep track, there's so many fees. 

Dangerous Don:  Not that many.  Not ten or fifteen.

Johnny:  Wrap fees.   Sub-transfer agency fees.  Mortality fees.   Finders fees.   Shareholder servicing fees.   Market adjustment fees.  All these fees on top of the biggest fees of all, which are the expense ratios of the mutual funds inside the 401(k).   Here, here’s an interesting article I can give you.

Dangerous Don:  Sure.

Johnny:   Fact is, a generation ago, people put their savings in their savings account in a bank.  The bank paid you 3% a year interest.

Dangerous Don:   That was before my time.

Johnny:   Today, people put their savings in their 401(k).   But now, you pay them 3% a year in fees.

Dangerous Don:  Very reasonable fees.  Competitive rates.

Johnny:  The industry always says things like that.  Sure, the fees are competitive.  But the whole system is rotten to the core.

Dangerous Don:  Not true.

Johnny:  Let’s take a look at each $100 you’ve got in your 401(k).  Every year, you pay upwards of 3% in fees and costs.  That’s $3.00 a year.  For each $100 you’ve saved up.

Dangerous Don:  3% is nothing.  Heck, sales tax is 4%.

Johnny:   So. . . . let’s take a look at your situation year by year.  That's the best way to see what's going on.

Dangerous Don:   Okay.

Johnny:  Let's take a look at what you contributed in 1992.   That was twenty years ago.  Each $100 that you put in has gotten whacked by a $3.00 fee, every year, for twenty years.   So. . . . out of each $100 you contributed in 1992, you’ve paid a total of $60 in fees.   Twenty times three.   So, now you’ve only got $40 left, out of your original $100.   Basically, 60% of what you contributed in 1992 is gone.   Used up to pay investment management fees.

Dangerous Don:  Wait a minute!   Only $40 left?   That can’t be right!

Johnny:   But it is right.

Dangerous Don:  Besides, that original $100 has been growing and growing and growing. . . .

Johnny:   Maybe.   Lot of ups and downs over the last twenty years.   Who knows?   Maybe there's going to be steady growth in the future.   Or maybe not.   But here's the thing.   Let’s be frank. . . . . no investment strategy will ever work, no matter how brilliant, when you have fees eating away that big a chunk.

Dangerous Don:   Hey, now wait a minute, Johnny!    These are just. . . . I mean. . . . just wild exaggerations! 

Johnny:   When you losing 60% in fees, nobody’s going to be able to dig you out of a hole that deep.

Dangerous Don:   But that’s over twenty years.   Twenty years!   Who pays any attention to something that slow?   Something that plays out over twenty years?

Johnny:   Exactly!   Right there is the Big Trick that the financial industry plays on people!  People don’t pay attention to a lousy little 3% a year.  And they never stop to think that 3% a year adds up to 60% over twenty years.

Dangerous Don:  Hey, if nobody misses the money, I’d say let’s keep on taking it.

Johnny:   Spoken like a true investment professional!

Dangerous Don:   Seriously. . . .

Johnny:  You know. . . . there’s been so much talk recently about income inequality.  People don’t realize that 401(k)’s play a big part in that.

Dangerous Don:  How so?

Johnny:  Nationwide, there’s a couple trillion dollars sitting in these 401(k)’s.   Try figuring out what 3% a year, on a couple trillion bucks, brings in to these investment managers on Wall Street.

Dangerous Don:   I’d say. . . we’re talking. . . some pretty big bucks.

Johnny:  Mega-bucks.  The whole 401(k) movement, with all these tax incentives, has been a huge shot in the arm for Wall Street.

Dangerous Don:   But they earn it!  The market was up almost 6% in 2011.

Johnny:  Struggling to get back to where it was in 2007.  And still not making it.

Dangerous Don:  Takes time.

Johnny:  And in 2003, 2004, 2005 and 2006, the market was struggling to get back to where it had been in 2000, before the DotCom Crash of 2001.

Dangerous Don:   This is all just ancient history.   Who cares?

Johnny:  Fact of the matter, the S&P 500 was lower on January 1, 2010 than it was on January 1, 2000.

Dangerous Don:  One bad decade doesn’t ruin a rally.

Johnny:   So. . . . if you kept your 401(k) mostly in equity stocks, you were pretty much in the same place in 2010 as you were in 2000.  Minus, of course, those 3% fees that you paid every year over that ten-year period.  Which took a total bite of 30% out of what you had in 2000.

Dangerous Don:   Wait a minute!   I don’t believe 30%.   Way too high.

Johnny:   Okay. . . . . let’s try an example.  Let’s say you had $100,000 in your 401(k) in January, 2000.   And you had it all invested in one of the thousands of mutual funds that have an annual expense ratio of 1.50% or higher.  And let's say this fund charges another 1% a year in 12b-1 fees, which is also pretty typical.  Plus, of course, you've got all those additional fees. . . . please bear with me. . . . . for operating the 401(k) itself, as opposed to operating the funds inside the 401(k).

Dangerous Don:   Okay.  I'm listening.

Johnny:   So. . . . . let’s say, just to keep it simple, that this fund managed to keep pace with the S&P 500 during the next ten years, from 2000 to 2010.    So, in January, 2010, based on the S&P 500 Index, your $100,000 should have been almost flat.   A little under $100,000.

Dangerous Don:   I’m listening.

Johnny:  But actually, that’s not what happened.   Fact of the matter, you’re way under $100,000.  Because you paid $3,000 in fees every year, for ten years.  For a total of $30,000 in fees.  Your original $100,000 is now less than $70,000.  You're down 30%.

Dangerous Don:   All I can say is. . . . you prophets of doom are all alike.  No guts.  You need guts to make it on the stock market.

Johnny:  Guts?

Dangerous Don:   One big play can turn everything around.

Johnny:  One big play?   Such as?

Dangerous Don:    Koscot Interplanetary.    Guys in my 401(k) are going to triple their money in a couple months.

Johnny:   That stock is headed for big trouble.   Everything about it smells wrong.

Dangerous Don:   Everybody and his brother have already bought Koscot.  How can so many people be wrong?

Johnny:  Interesting that your strategy is to go for the “big plays”.    What ever happened to the expression “playing the stock market”?

Dangerous Don:   Dunno.

Johnny:  Used to be. . . . when I was young. . . . people would say that so-and-so made money “playing the stock market”.

Dangerous Don:   Point being. . . . ?

Johnny:   The whole idea. . . back then. . . was that the stock market was strictly a rich guy’s game.  You only “played” the stock market as a game.  Only if you were so rich that losing a few million didn’t matter.

Dangerous Don:  And. . . . ?

Johnny:   We should go back to that idea.  That was the right idea.  Average people should be putting their savings in a bank account, not in the stock market.

Dangerous Don:   Ridiculous idea.   Banks don’t pay squat in interest.   What?   Less than 1% on savings accounts?

Johnny:   I know, and that’s a big problem.  But low interest rates are a fly-speck problem, compared to watching your entire savings drop by over 50%.   Like what happened in 2008 and 2009.

Dangerous Don:  Still think it’s a ridiculous idea. . . .

Johnny:  . . . . not to mention paying all those investment management fees.

Dangerous Don:   Oh man!   More of these wild exaggerations about 401(k) fees!   Johnny, you're driving me crazy!

Johnny:  Proof is in the pudding.   Because of all those fees, and the huge stock market losses in the Crash of 2001 and the Crash of 2008, lot of people retiring in 2012 are going to be really hurting.

Dangerous Don:   Their own fault.  Should have been more aggressive.

Johnny:   Problem is, what's the total amount, when you add up all the contributions into your 401(k) over your entire lifetime?   Lot of people are finding out they've got less today in their 401(k) than the total of what they put in.   

Dangerous Don:   Because they didn't invest in deals like Koscot Interplanetary!

Johnny:   Amazingly enough, these people would have been better off putting their money into some kind of savings account option in their 401(k), even if it had zero interest.   Think about that.   Zero interest would have been better than keeping your savings in the stock market.

Dangerous Don:  Well. . . . guess we’ll have to talk about that next time.

Johnny:   We’re out of time?

Dangerous Don:   Sad but true.

Johnny:  Okay. . . . last thing. . . . . since I'm the Number Two guy on this blog. . . . . I'm supposed to ask you about the motto of the MACHO INVESTING blog.   Something like that.  So, Don, what's the motto of MACHO INVESTING?

Dangerous Don:   Attaboy!   Good job!    Our motto is BE DANGEROUS!

Johnny:  And what's the take-away from this post?

Dangerous Don:   Same thing I've been saying for years.   All the finance books will tell you.  Risk equals Reward.   So, obviously, MORE RISK EQUALS MORE REWARD.

Johnny:    Dangerous idea.

Dangerous Don:   That's why they call me Dangerous Don.   I'm afraid of nothing!    When I walk out on the trading floor, people are afraid of me!    I really like that!

Johnny:   Heck of an imagination.

Dangerous Don:   I tell you. . . . people are terrified!   They can't figure out what I'm going to do next!

Johnny:   No man is an island.  But some of us are very, very long peninsulas.

Dangerous Don:   I tell you, that's what MACHO INVESTING is all about!   Shock and awe!   Show 'em what you're made of!

Johnny:  Before we go, ask me what my bottom-line is.

Dangerous Don:   Okay.   Johnny, what's your bottom-line?

Johnny:  First, folks should keep their 401(k) money in low-cost index funds.    Like Vanguard Total Stock Market Index.   You get better long-term returns.

Dangerous Don:   You're boring me to death.

Johnny:   Plus, index funds usually don't have these astronomical fees that eat the guts out of your savings.   If your 401(k) doesn't have any index funds, head down to your Human Resources office, and pound your fist on the table until they get you some!

Dangerous Don:   You sound angry.

Johnny:   Bet your sweet bippy I'm angry! 

Dangerous Don:   That's it?

Johnny:   Also, make sure  your company adds some bond index funds, as one of the options in your 401(k).   Fact is, as you get older, you gotta move gradually into more bonds.

Dangerous Don:  That's it?

Johnny:  Hammer your Human Resource department on those 401(k) fees.   Don't let them get away with wishy-washy answers.   Mention every one of these fees I've talked about.   Revenue sharing.  Wrap fees.  Sub-transfer-agency fees.  Pin them down on every single one of these fees.

Dangerous Don:   Human Resources?   Forget it!   They won't know from a hole in the wall.

Johnny:    Sometimes the Human Resource folks won't know.   Sometimes, nobody in your company will know.  If they've hired an outside investment manager, Human Resources  probably doesn't know squat.  They won't even know whether your 401(k) plan is being charged these fees or not.   So you have to force them to go find out.   Wall Street is really good at hiding fees.  You're going to have to fight. . . . . to get the full story.

Dangerous Don:   Okay!   Thank you, Johnny!   Time's up.   Good-bye everybody!

Johnny:   See you next time!

Dangerous Don:    And don't forget what I told you!   Whenever you buy stock, any stock, always mention my name.

Johnny:   He gets a commish.

Dangerous Don:   Stay tuned to the MACHO INVESTING blog!  Believe me, you are going to make a TON of money!