CHAPTER FIVE: THE PREDATORS CLUB

[transcript]

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

Johnny:  Actually, we're in Dunmore.  Twenty minutes from downtown.  On Argyle Street.  Sitting in Don's kitchen.  But welcome back, everybody!

Dangerous Don:  Soooo. . . . . moving right along. . . . . I’m your host, Dangerous Don.   I’m sure you recognize the name Dangerous Don.   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, yes of course, sitting next to me is our very distinguished co-host, Johnny Doorknob, dean of the Scranton financial gurus.

Johnny:   Actually, I'm a plumber.  Retired plumber.  Live next door to Don.

Dangerous Don:  Folks, we have a special guest on our blog today.  We are very fortunate to have with us Mr. DigDig Agroom from the Scranton office of the world-famous Wall Street investment banking firm, Golden Sox.

DigDig Agroom:  Thank you, Don.  I’m honored to be here.

Dangerous Don:  And we are very lucky to have you here with us.

DigDig Agroom:  MACHO INVESTING is the gold standard of the Scranton financial blogs.

Dangerous Don:  Speaking of gold, I notice you're wearing the traditional  golden sox.

DigDig Agroom:   Here, take a look.   We’re very proud of this tradition.  Whenever somebody is promoted to being an officer of Golden Sox, he or she is allowed to wear the traditional golden sox.

Dangerous Don:  Allowed and actually required, as I understand it.

DigDig Agroom:  We don’t publicly discuss the details of our firm’s internal rules.   Let’s just say that our golden sox seem to be a good protection against bad luck in the stock market, and against most criminal prosecutions.

Johnny:  And your baseball team?   The Golden Sox?

DigDig Agroom:  We love ‘em.  Through thick and thick.   Pitching has been a problem all season.

Dangerous Don:  Let’s talk about the market, and about investing in general.

DigDig Agroom:   Sure.  I want to say first, Don, that we’re really excited about the work that you’ve been doing.

Dangerous Don:  Thank you, sir!   Appreciate it!

DigDig Agroom:  You're a very sophisticated investor.

Dangerous Don:   Appreciate the compliments!

DigDig Agroom:  What we at Golden Sox particularly like is your basic Macho Investing philosophy.  Always coming in strong when the market has been on a roll for months and it just can’t seem to stop going up.

Dangerous Don:  100% with you on that.  Always keep the wind at your back.  Momentum investing.  Always go with the flow.

DigDig Agroom:  So. . . . when the momentum is with you, and the market is high, you. . . . ?

Dangerous Don:  Buy!

DigDig Agroom:  And the opposite?  When the market has been dropping like a rock for months?

Dangerous Don:  Get out!   Never mess with a sick market.

DigDig Agroom:  So. . . . . when the market is low, you. . . . ?

Dangerous Don:  Sell!

DigDig Agroom:  Buy High, Sell Low?

Dangerous Don:  Exactly!  That’s the Macho Investing strategy!

DigDig Agroom:  And the fact is. . . . . you have tens of thousands of people who read your blog every week!   And apparently they believe what you're saying!   That’s really impressive!

Dangerous Don:  Right!   Very happy to hear you say that!

DigDig Agroom:  Those tens of thousands of people are potentially a huge pool of money.

Dangerous Don:  Those are the folks who keep us going!

DigDig Agroom:  We at Golden Sox think there’s a real potential for synergies here.

Johnny:  Interesting. . . . .

Dangerous Don:  Very interesting. . . . .

DigDig Agroom:  Let me explain.  Golden Sox represents clients who are less sophisticated than you are, Don.  When the market is high, these clients want to sell their stock.

Dangerous Don:  No offense, but that’s idiotic.  You should never lose your nerve in a hot market.

DigDig Agroom:  Exactly!  So, you see. . . . . these clients want to sell,  just when you want to buy.

Dangerous Don:  Okay, I see what you're saying.

Johnny:  Careful, Don.

DigDig Agroom:  Sounds like a natural partnership.

Dangerous Don:   A natural partnership!

DigDig Agroom:   A natural partnership!

Johnny:   Don, Don, wait a minute!  Don’t you see what he’s saying?

Dangerous Don:   He's saying we're natural partners!

Johnny:   Partners?   That's crazy!   Listen, Golden Sox just wants to get a hold of lots of Stupid Money.  Meaning who?   Meaning the ten thousand poor folks who follow this blog.  Why?  So Golden Sox will have suckers to sell to at the top of the market, when they want to cash out.

DigDig Agroom:  Like I said, our clients are less sophisticated than Don.

Dangerous Don:  That’s right.

Johnny:  Just think. . . . if there was nobody dumb enough to buy, at the top of the market, then they’d be stuck.   They'd have nobody to sell to.

Dangerous Don:  Ahhh. . . . . . . moving right along. . . . .

Johnny:   Don, listen to me!  The market always wants more Stupid Money.  Just to be the other side of these smart trades, like the ones Golden Sox does.  That's where all these 401(k)'s come in. . . . . 

Dangerous Don:  Ah, Johnny. . . . . . I said MOVING RIGHT ALONG!

DigDig Agroom:  Don, we’ve already set up an organization for sophisticated investors like yourself.  We call it the Predators Club.

Dangerous Don:  I like the name!

DigDig Agroom:  It’s specifically designed for aggressive investors like yourself.

Johnny:   Oldest trick in the world.  Tell the victim he’s really the predator, and sucker him in a little further.

Dangerous Don:  Ahh. . . . . Johnny. . . . once again. . . . . MOVING RIGHT ALONG!

DigDig Agroom:   We pick out risky stocks. . . . .

Dangerous Don:   Good!   I like that!  No little old lady stuff!

DigDig Agroom:   We buy stocks that some of our more conservative clients think are over-valued. . . .

Dangerous Don:  No guts, those guys!  You need guts to survive in this business!

DigDig Agroom:  So, it looks like a perfect fit for your audience, for those tens of thousands of Macho Investors.

Dangerous Don:   I agree.  Looks like a perfect fit!

Johnny:  Ask him about the fees.

DigDig Agroom:  Well, yes. . . . . there is a modest annual fee to belong to the Predators Club.  Just to cover our costs.

Dangerous Don:  How much?

DigDig Agroom:  Ahhh. . . . . five hundred dollars a year.

Dangerous Don:   Wow!   I didn’t realize.  Five hundred bucks a year!   Ouch!   Out of my price range, that’s for sure.

DigDig Agroom:   We do have a Plan B Membership.

Dangerous Don:  How much is that?

DigDig Agroom:  Ten dollars a week.

Dangerous Don:  Ten dollars a week!  Now you’re insulting me!

DigDig Agroom:  Insulting you?   How do you mean?

Dangerous Don:  Don’t ever nickle-dime a guy for a lousy ten bucks a week!

DigDig Agroom:  So. . . . . you’re okay with that fee?

Dangerous Don:  Of course! 

Johnny:  Don. . . . . .

Dangerous Don:  I’m not going to sweat a lousy ten bucks a week!   You guys think I’m cheap or something?

Johnny:  Don. . . . .

Dangerous Don:  So. . . . DigDig, who does Golden Sox pick for the Super Bowl?

DigDig Agroom:   Ahhh. . . . don’t really have an answer for that one.   I know who I'm rootin' for.   But, as a firm, we don’t have an official pick.

Dangerous Don:  That. . . . surprises me.

DigDig Agroom:   Why?

Dangerous Don:  The Super Bowl Rule.  About teams from the old NFC conference.

DigDig Agroom:  You mean. . . . . wait a minute. . . . . you mean that old saying that. . . . if one of the teams from the old NFC conference wins the Super Bowl. . . . ?

Dangerous Don:   Exactly.  Like the Eagles or the New York Giants.  If one of those teams wins the Super Bowl, then the market will do great all the next year.

DigDig Agroom:  And if it's a team from the old AFC conference. . . . .

Dangerous Don:   You're looking at a Bear Market for the rest of the year.

Johnny:  Crazy superstition.

Dangerous Don:  It's not a superstition!   It’s a proven fact!   And I’ve made it a core investing strategy for the 401(k) that I run.

DigDig Agroom:  Well, I’ll be darned!

Dangerous Don:   Hey, don't forget, I'm a fiduciary!   I gotta pay attention!   The Super Bowl Rule is real important!

Johnny:  Plenty of time to talk about stock-market superstitions in our next session, right Don?

Dangerous Don:  It’s a fact, not a superstition.   But, you’re right Johnny, we’ve run out of time.

Johnny:  Adios, everybody!

DigDig Agroom:  Very nice to have been a guest on your blog.

Dangerous Don:   Thank you again for coming.  And folks, so long!   See you next time!   Stay tuned to the MACHO INVESTING blog!   Believe me, you’re going to make a TON of money!

CHAPTER FOUR: A WELL-DECORATED BANK ACCOUNT

[transcript]

Dangerous Don:   Welcome back everybody!  Welcome back to the MACHO INVESTING blog, the home of. . . . well. . . . the home of you and me and many other stock market millionaires.   I’m your host, Dangerous Don, and. . . . .

 Johnny:   . . . . . and this is my co-host, Johnny Doorknob.

Dangerous Don:  This is my co-host, Johnny Doorknob.   You folks have probably heard the name Dangerous Don.   I happen to be one of the greatest stock-market investors of all time.  And  I think we can all agree, Johnny Doorknob is the go-to guy in the Scranton financial community.

Johnny:   Thanks, Don.   And I understand you’ve got a bit of good news!

Dangerous Don:  That’s right, Johnny.   Believe it or not,  I got myself a job!   A real day job!

Tana Marie:  Wonders never cease.

Dangerous Don:   Folks, that lovely voice you just heard was my lovely wife, Tana Marie.

Johnny:   So. . . . . tell us about your new job.

Dangerous Don:   I’m now officially the chief investment advisor of a 401(k).

Johnny:  Congratulations!

Dangerous Don:   Thanks, Johnny.   Terrific 401(k) plan.   Covers all the employees of a good little company here in Scranton.   Misery Loves, Inc.   Really solid folks, solid reputation.  They make all kinds of antique furniture.

Johnny:   Know them well.   So. . . . . those guys know how to turn a buck, right?

Dangerous Don:   Doing very well for themselves, thank you!   Got about 150 employees in their factory.  And now, guess what?   I’m the Man with the Plan!   The Man in charge of each employee's financial future!

Johnny:   I have. . . . . mixed emotions.

Tana Marie:   You’re going to be changing all their investments, right?  Moving over to your MACHO INVESTING style, right?

Dangerous Don:   Took the words right outta my mouth!   I’ve got a thousand ideas!

Johnny:   No offense, but somehow I’m glad I’m not an employee of this company.

Dangerous Don:   One mutual fund I definitely want all of my employees to get into is Tajikistan Derivatives Institutional.   What a great fund!   A home-run that really brings home the bacon!

Tana Marie:   Holy mixed metaphors, Batman!

Johnny:   Why a home-run?

Dangerous Don:  Making bets against Tajiks is like stealing candy from a baby!   You know what?   Tajiks always lose!    They are the unluckiest people on Earth.   In their entire 2,000-year history, the Tajiks have lost every single bet they ever made.

Johnny:  Ahhh. . . . . . almost afraid to ask. . . . . what kind of bets does this Derivatives Fund make?

Dangerous Don:   You name it.   Are oil prices going to go up or down?   Silver futures.  Greek bonds.   The Super Bowl.   American Idol.   Flip of a coin.  Who cares?   With derivatives, you can bet on anything.   One thing for sure -- Tajiks will always make a beeline for the losing side of any bet.   It’s their nature.

Johnny:   So. . . . this, ahhh,  Derivatives Fund. . . . like, what kind of track record do they have?   How long have they been around?

Dangerous Don:  About two months now.  Buddy of mine set it up.

Johnny:  So. . . . there’s no track record.

Dangerous Don:   Not important.  What’s important is the 2,000-year track record of the Tajiks.  They never win!

Johnny:  Heck, they sound like me. . . . . .

Dangerous Don:   That's the whole name of the game in finance today.

Johnny:  What?

Dangerous Done:  You search the world, looking for folks who are unlucky.  Just naturally unlucky.  Born losers.

Johnny:   And then. . . . . ?

Dangerous Don:   You sign them up!   Get them to sign some kind of credit default swap.   Get them to bet against you.

Johnny:   How do you get them to sign?

Dangerous Don:   Tell them they're "sophisticated investors".   Some kind of garbage like that.

Johnny:   Anybody called me a "sophisticated investor" and I'd check my wallet.   Make sure it's still there.

Dangerous Don:   Fortunately for the industry, for every street-smart guy like yourself, there's fifty idiots.

Johnny:   That bad?

Dangerous Don:  That good!   There's so much Stupid Money out there, it's unreal!  The SEC ought to just give up.  Throw in the towel.

Johnny:  Throw in the towel?

Dangerous Don:   Deep in their guts, these people want to be cheated.   No point trying to protect them.

Tana Marie:   Don, maybe you could tell the folks a little about my job?

Dangerous Don:   Absolutely!   Love to!   Folks, my lovely wife Tana Marie is an Account Designer. . . .

Tana Marie:   Account Decorator.

Dangerous Don:   Account Decorator.  At the Shazam Bank. . . .

Tana Marie:  Shazam Bank and Casino.

Dangerous Don:  Shazam Bank and Casino.   They added tables a couple of months ago, right?   Blackjack?

Tana Marie:   We've got blackjack and Texas Hold ‘Em.   Plus 10 slot machines.  All in our lobby. . . . . .

Johnny:  All the banks have gambling now.  To stay competitive. . . . .

Tana Marie:  But we're not like a real huge casino or anything.

Johnny:  Plus you've got foreign exchange betting. . . .

Tana Marie:   Right.  You can bet on FOREX.  All you do is pick out some currency.  Say, the euro.  And then you bet whether it will go up or down. . . . . against some other currency.

Johnny:   Up or down. . . . as of the end of that day, right?

Tana Marie:   Oh no, no!  As of the end of each minute.  You bet which currency will beat out the other currency over the next minute.

Johnny:   I like all those Bloomberg FOREX monitors you’ve got in the bank lobby.  Pretty fancy stuff.

Tana Marie:  People love them.

Johnny:  Gives these poor suckers betting foreign currencies the idea they’re actually in control.

Tana Marie:  And don't forget, we have our "Double-or-Half" Savings Accounts.

Dangerous Don:  How's that work?

Tana Marie:  At Shazam, about 15,000 people have this kind of account.  Every month, the bank picks out two people, two account-holders.   Completely at random.  One person has their account balance doubled.  The other person has theirs cut in half. . . .

Dangerous Don:  Wow!   Double your money!   Bet that's pretty popular!

Tana Marie:  That's right.  Lots of people.  So. . . . . don't forget, there's a lucky winner every month!

Dangerous Don:   So. . . . Tana Marie. . . . tell us what an Account Decorator does.

Tana Marie:   Well, whenever you go online to look at the money in your bank account, you want to see everything all neat and orderly, right?

Dangerous Don:  Absolutely!

Tana Marie:   So, that’s our first responsibility.  To make sure the stacks of bills and coins are all neat.  People don’t want to see just a jumble of coins all over the floor.

Dangerous Don:   That's important.   That first impression.  The visual look of your bank account.

Tana Marie:   Exactly.  Especially the coins.  We’ve got to keep the coins stacked up neatly.

Dangerous Don:  So. . . . . what's the decorating part. . . . ?

Tana Marie:  Well, many people want more than just a neat-looking bank account.  That’s where I come in.  People want that little box where their money is to have carpeting.  Wallpaper.  Drapes.  Miniature furniture.

Dangerous Don:  So. . . . you can make it so your bank account has kind of a home of its own?

Tana Marie:  Exactly.  And we can color-coordinate everything that’s inside the box.  People love putting these little miniature chairs and sofas in between the stacks of dollar bills.

Dangerous Don:  Real homey. . . .

Tana Marie:   People love it.  Some people even put in little miniature windows along the wall.  Fake windows, of course. . . .

Dangerous Don:   Just like. . . .

Tana Marie:  Some people put these little stuffed animals inside their box, to “guard” their money.

Dangerous Don:  Just like. . . . .

Tana Marie:  One time, a counter-party came in. . . .

Johnny:  A counter-party?

Tana Marie:  That’s what banks have to call our customers now.

Dangerous Don:  That’s right.  Banks can’t call their customers "customers" anymore, right?

Tana Marie:  The lawyers made us do it.

Johnny:   Counter-party!   Oh my god!   What are we coming to?

Tana Marie:   Fact is, starting next month, we're not even supposed to call it a "bank" anymore.

Dangerous Don:  You call it a. . . . . . ?

Tana Marie:  Money Bazaar.

Johnny:  Bizarre?

Dangerous Don:   Interesting. . . . .

Tana Marie:   Anyway. . . . this one lady came in with photographs of her living room.  She wanted us to duplicate everything in her living room.  Even little miniature lamps. . .

Dangerous Don:   What can I say?   Takes all kinds.

Johnny:   More on that next time, right Don?   And next time, we’ll find out the reason why banks now have to call their customers “counter-parties”, right Don?

Dangerous Don:   Correcto, my friend.  Once again, folks, we are out of time.  So. . . . see you all next time. . . . .

Tana Marie:  Bye bye!

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

CHAPTER THREE: MY FOLKS WOULD HAVE STARVED WITHOUT WOOLLY MAMMOTH MEAT

[transcript]

Dangerous Don:   Welcome back everybody!  Welcome back to the MACHO INVESTING blog, home of the stock market millionaires!  We're blogging direct from our worldwide corporate headquarters, right here in Scranton, Pennsylvania. 

Johnny:  . . . . . right here in Scranton. . . .

Dangerous Don:  I’m your host, Dangerous Don, and this is your co-host, the dean of the Scranton financial gurus, Johnny Doorknob!

Johnny:  Long story short, Don and me. . . . .

Dangerous Don:  You folks probably recognize the name Dangerous Don.  I happen to be one of the greatest stock market investors of all time.

Johnny:  . . . . . . . never got out of Scranton.  That says it all.

Dangerous Don:  You know, Johnny, just as a little bit of local Scranton. . . . . before we get into the serious stuff. . . . . . why don't you tell the folks out there about that big tooth you’ve got.   The one over your fireplace.

Johnny:  The woolly mammoth tooth?

Dangerous Don:   Yeah.

Johnny:  Well. . . . . it’s a woolly mammoth tooth.  Been in my family for something like 12,000 years.

Dangerous Don:   Long time.

Johnny:  Not for a tooth.  That enamel stuff never rots.  It’s the same as the day my folks killed the mammoth.

Dangerous Don:   Where did they kill the mammoth?

Johnny:   Best we can figure out, it was in what’s now the Ukraine.  Which was big-time mammoth hunting territory back then.   12,000 years ago.

Dangerous Don:  Your folks hunted woolly mammoths?

Johnny:   That's basically all we did.    Would have starved without mammoth meat.

Dangerous Don:   Wow!   Hunting mammoths!   Must have been kinda like. . . . .  investing, right?   Gets you pumped up! 

Johnny:   Investing gets you pumped up?   Not me.   About as exciting as watching paint dry.   Slow and Steady.  That's my motto. 

Dangerous Don:    What a family!   Hunting woolly mammoths!

Johnny:   Just trying to eat.   Wasn’t like we were different from anybody else.   Back then, everybody had to eat mammoth.   All there was to eat.   Bet your family did too.

Dangerous Don:   Okay. . . . now for some serious stuff about investing. . . . .

Johnny:  We were nothing special, hunting mammoths.  Everybody else was doing the same thing.

Dangerous Don:   . . . . . serious stuff about MACHO INVESTING.

Johnny:   Which is what our blog audience came here for.

Dangerous Don:  Right.  So, Johnny, you just retired?

Johnny:  Yes, sir.   After 45 years.

Dangerous Don:   Tell us about that.  What was your retirement strategy?   Invest in your 401(k)?

Johnny:   Never had a 401(k).   Nobody I worked for ever offered us 401(k)’s.

Dangerous Don:   Interesting.  So. . . . . . how come you know so much about 401(k)'s?

Johnny:   Trying to help out my son.  His company has the 401(k) from hell.   High management fees.  Lot of hidden fees.  No index funds.   No bond funds.   Employer match is next to nothing, year after year.   Just a death-trap.   And a bonanza for Wall Street

Dangerous Don:   So. . . . . lot of problems with 401(k)'s?

Johnny:  Don't get me wrong.  I'm not against 401(k)'s.  I'm just against the ones that are rip-offs.  

Dangerous Don:   So. . . . back to what you did yourself.   To get ready for your own retirement.  You just invested your savings on your own?

Johnny:   Might call it that.  Except calling it “investing” kind of overstates it a bit.   I just saved up $6000 every year.

Dangerous Don:  And you invested in. . . . . . . ?

Johnny:   Bank CD's.

Dangerous Don:   For 45 years?

Johnny:   Right.

Dangerous Don:   What kind of returns were you getting?

Johnny:   I figured it out once. . . .  over the whole 45 years. . . . . . interest on my CD's averaged about 4.8% a year.  Of course, recently, it's been much less than that.  But ten years ago,  I was getting over 6%.

Dangerous Don:   Only 4.8%!   Unbelievable!   I mean. . . . . what's the point?  Where's the action in a lousy 4.8%? 

Johnny:   Action?

Dangerous Don:    Johnny. . . . . with all due respect. . . . . you're missing the whole point of investing.

Johnny:   Action?

Dangerous Don:   Investing is about making money.  But it's also about showing people what you're made of.   You know. . . . . . bragging rights.  In other words, you want to kick butt and take names.

Johnny:  Show people what I'm made of?   Come to think of it, mostly just common sense.

Dangerous Don:    I’ve never invested in anything that didn’t guarantee at least a 20% return!

Johnny:  I’m lucky I didn’t know you back then.

Dangerous Don:  Think of what you could have made, if you had invested at 20%.

Johnny:   I know what I did make.  That’s all that counts.

Dangerous Don:   Are you okay with telling our audience how much you made?   Like, total?

Johnny:   Sure.   No problem.   I retired last month with over a million bucks in my savings account.   Not bad for a plumber.

Dangerous Don:  It's one heck of a big number. . . . but. . . . .

Johnny:  That’s what you end up with, when you save up $6000 every year, for 45 years, at 4.8% interest.

Dangerous Don:   But. . . . . Johnny. . . .

Johnny:   Ended up with more than folks I know who's got a 401(k).

Dangerous Don:   But. . . . . Johnny. . . .

Johnny:  Even when they had employer matches.

Dangerous Don:   But. . . . . Johnny. . . . .

Johnny:  Problem is, they had too many stock market crashes.

Dangerous Don:   But. . . . Johnny. . . .  if we had met earlier, and I had taught you how to do Macho Investing, that million bucks could have been ten, twenty, thirty million.

Johnny:   No comment.

Dangerous Don:   No regrets?

Johnny:   Nope.  You’re the guy I feel sorry for.

Tana Marie:   Please feel a little sorry for me too.  His day-trading costs us $4000 a year.   That's money right out the door, in stock-market losses.

Dangerous Don:   Moving right along. . . . folks, that was my lovely wife Tana Marie you just heard.

Johnny:   Plenty of time to talk about all that day-trading stuff next time.

Dangerous Don:  Right you are!   Folks, we’ve run out of time!  Hope you learned a lot!

Johnny:  Forgive me, folks.   I'm supposed to ask him this.   Don, what's the motto of the MACHO INVESTING blog?

Dangerous Don:  BE DANGEROUS!

Johnny:  Meaning?

Dangerous Don:   Risk equals reward.   That's what all the finance books tell you.  So, obviously, MORE RISK EQUALS MORE REWARD!  

Johnny:  Complete looney-tunes!

Dangerous Don:  And it's a lot more fun when you're dangerous.    Remember, bottom line, investing is just like bungee-jumping.

Tana Marie:  Don't you ever dare talk about that bungee-jumping stuff!   Never again! 

Dangerous Don:  So, folks. . . . .  stay tuned to the MACHO INVESTING blog.  Believe me. . . . you’re going to make a TON of money!