...if only these astounding claims of trading profits were true
01-Aug-2012 •Dhirendra Kumar
A few days back, I received a mass marketing email from a prominent stockbroker. The mail was an advertisement for training courses for traders that the brokerage runs. These are not just online courses but an actual physical school of sorts that the brokerage appears to run. From the details in the email, it seemed clear that attending the training would require a considerable commitment of time and effort from the trainee.
What caught my eye about this email were the claims about returns in the headlines. There were two testimonials from people who said that they were actual alumni of the training academy. One said that he saw returns of 20 per cent every three months from one type of trade and a doubling of the portfolio every five months from another type of trade.
These are astounding numbers. Doubling of money every five months is 427 per cent a year. This person’s money more than quadruples every year. In just five years, he would have more than 4,000 times the money he had initially invested. Somewhat longer periods would easily see him become one of the richest Indians even if he started off with just a few lakhs.
The advertisement doesn’t pull any punches. It doesn’t say that this happens once in a while, or only with one trade or anything like that. It’s unequivocal—the portfolio doubles every five months due to the strategies that are taught at the academy.
Does anyone believe claims like this? They must, because claims like these are the bread and butter of this business. It’s just that they are normally made orally, as anecdotes to be told while trying to attract new customers. The only thing that is unusual here is to see them being put down in black and white and sent to a huge number of people, laying them open to public ridicule perhaps regulatory scrutiny.