March 21, 2007
Tropical Views
Kim Snider, Kim Snider Financial Communications, Chronim Investments and/or Snider Advisors make no representation that the information and opinions expressed are accurate, complete or current. The opinions expressed should not be construed as financial, legal, tax, or other advice and are provided for informational purposes only. Call 866-952-0100 to request the Snider Investment Method™ Owner's Manual, which includes a description of the Snider Investment Method, investment objectives, risks, suitability and other information. Please read and consider carefully before investing. All investments are subject to risk including possible loss of principal.
February 01, 2007
Seminar Bait and Switch
Hi Kim,
My father and I recently attended a [name of famous motivational speaker removed] seminar together. It was a really nice opportunity for me to spend some time with him. During the conference, [investment guru] spoke about investing in the stock market, options, and covered calls. He also spoke about earning 15% per month as a minimum investment strategy. The tool, as it turned out, that he described was from a company called [name removed to prevent a defamation suit].
My father, excited about the prospect of helping to put his son back on track, paid $2,000 for a "training session" that was supposed be a $10,777 value. We attended the training seminar with about 600 other people. None of us worked on computers as we "learned" how to use the [company name removed] system.
In the end, in order to fully understand how to make (not lose) money, they offered a discounted basic ($5,000) to advanced ($25,000) training program. The $25,000 program was, of course, the only real way to ensure financial success. It really felt like a bait-and-switch proposition, so we chose not to pursue their advanced training, and chose instead to research the alternatives.
I attended one of your free seminars a little over a year ago. At the time, in addition to the training (about $3,500), you indicated that I would need a minimum of $50K to invest. As was the case for me then, I do not have the $50K. Is this still the case or could I take the training and grow a smaller amount into future wealth?
There are a number of extenuating circumstances that have controlled my funds, but I am determined to get back on my feet. I felt that you exhibited a tremendous amount of credibility, much more that what I recently experienced, and thought I'd check back with you. Hope to hear from you soon.
Sincerely,
J.P.
My answer:
Dear J.P.-
Thanks for your note. There are a couple things you should know:
First, the U.S. stock market has returned an average of about 10% per year since 1929. Anyone who tells you they can make significantly more than that on a consistent basis is lying. There is no such thing as return without risk. It is a fundamental law, like gravity. There are some small things you can do to make a portfolio more efficient or to change the forms of risk and reward to make the trade-off more advantageous, but you cannot suspend the laws of gravity. Nor can you get a 25% or 50% annual return consistently without taking commensurate levels of risk.
Risk is something I talk to people about a lot. The statistical definition of risk is the variability of the return. The lottery or a slot machine are easy to understand examples. The odds of winning are very long, therefore the reward, if any, is extremely inconsistent. Accordingly, the risk of losing money is high.
There is a misconception, on which many seminar providers rely, that taking more risk guarantees you a higher return. That is simply not true. The only thing more risk guarantees is that you will lose more and you will lose more often. Someone will eventually make it big and that is the person you will hear about. But the odds are so long that most people lose far more than they make and they pay for the million to one long shot.
Second, there is another misconception that stock markets are great for turning very little into something big. Again, anyone who tells you that you can turn $15,000 into $3,000,000 in just a few years is appealing to your desperation and greed. The stock market is, and has always been, best suited to preserving and growing what you have made and saved elsewhere. The number of people who have made their fortunes by investing their own money in the markets are surprisingly few - and the small number tells us they are the lucky few.
Wealth is not created by getting outrageous returns. Very few can do that. That is like calling a lottery ticket your retirement plan. Wealth is created by somehow creating economic value, saving that money you are paid in return, putting it in the markets over long periods of time, and letting time and compounding returns make it grow. That is how you get rich. There is no shortcut. The hard facts are it requires you to create value for society, have the discipline to save it and the smarts to invest it prudently.
The difference between what I do and what some others are selling is I do not pretend to teach people how to get rich. Instead, I teach people how to prudently manage wealth they have already created. The distinction is subtle but important. Even more specifically, I teach people to manage wealth that will be used to generate income, either now or in the future, for retirement. The minimum amount to do that is $25,000 if you are looking to grow the income those funds can someday generate and don't need that income for at least five years. The minimum is $200,000 if you need portfolio income from those funds within the next five years.
The cost of our intensive, two-day workshop is $3,175 and there is no bait and switch. There are no advanced classes. You pay us one time and we teach you the Snider Investment Method™ top to bottom in that one sitting.
I hope that helps. I really appreciate the question and with your permission would like to post it (with names deleted) and my answer on the Snider Insider blog so others can benefit.
Kim Snider, Kim Snider Financial Communications, Chronim Investments and/or Snider Advisors make no representation that the information and opinions expressed are accurate, complete or current. The opinions expressed should not be construed as financial, legal, tax, or other advice and are provided for informational purposes only. Call 866-952-0100 to request the Snider Investment Method™ Owner's Manual, which includes a description of the Snider Investment Method, investment objectives, risks, suitability and other information. Please read and consider carefully before investing. All investments are subject to risk including possible loss of principal.
January 22, 2007
Frequently Asked Questions
The following questions were sent to us by an attendee at one of our free information sessions. We thought others might find our answers helpful:
How many of the taxable accounts managed by Chronim have had a margin call? Will margin calls require additional funds to be immediately added to the account? Is there any other way to handle the margin calls?
There have been no margin calls in the history of Chronim’s managed accounts. This does not mean it could never happen. We are aware of 2 or 3 margin calls in accounts managed by our students, which involved small accounts and securities where the margin requirement was raised. Margin calls can be satisfied by either adding funds or selling securities.
Would you recommend using your method as a strategy for all investment funds or as part of a larger investment strategy also employing mixed asset investments?
We recommend using the Snider Investment Method™ as an income generating strategy for funds which will be invested for a minimum of two years. It is up to the individual investor to assess their needs and decide the portion of their funds to invest.
What are your criteria for selecting an on-line broker?
The most important criteria for selecting an on-line broker is good, unbiased trade execution and the ability to trade options in an IRA account. Commissions, interest rates paid on cash reserves, customer service, and account fees are also important.
What are your criteria for selecting an on-line stock screener?
On-line stock screeners must be easy to use and offer the appropriate bankruptcy predictors.
This method seems to be strictly aimed at the domestic market. Since foreign markets appear to be booming these days, is there any thought to applying this to global markets.
We do not have any plans to expand the Snider Method to include global markets. The research and history of the Snider Method is based only on domestic markets.
Is it required that the 8 hr on-line Options course be completed before completing the course?
We highly recommend the beginning modules of Options Basics to build a basic understanding of puts and calls. The advanced modules are included for students interested in expanding their knowledge.
You report that 8% of your survey respondents are no longer using your method in your account. What are the reasons given for no longer using your method?
Snider Method alumni stop using the Snider Method for numerous reasons. Some of the reported reasons include: Funds needed for other uses, they want out of the stock market, they are not happy with results, and they prefer riskier investments. This is not an all-inclusive list.
Since you have said that it may take as long as 24 months to fully close out a position, why do you only offer a 3-month (90 day) money back guarantee? When does the 90 days start?
The 90-day test drive starts as soon as you complete the class. The 90-day test drive is designed to let people experience how the Snider Method works and if the process fits their expectations. It is not necessary to have a position close to understand how the Snider Method works. By the way, our guarantee is the best one we have seen in our industry. Many other seminar providers require students to either leave in the first few hours of the seminar, or if they complete the seminar and want their money back they have to agree to trade with a representative of the company for a minimum time period. We allow our students to complete the seminar and claim a refund for any reason within the 90-day window.
Kim Snider, Kim Snider Financial Communications, Chronim Investments and/or Snider Advisors make no representation that the information and opinions expressed are accurate, complete or current. The opinions expressed should not be construed as financial, legal, tax, or other advice and are provided for informational purposes only. Call 866-952-0100 to request the Snider Investment Method™ Owner's Manual, which includes a description of the Snider Investment Method, investment objectives, risks, suitability and other information. Please read and consider carefully before investing. All investments are subject to risk including possible loss of principal.
January 10, 2007
Mailbag - One Year After
I took your seminar in January of 2006, in February began using the Snider Method to manage my Category 3 non-margin account, and have been very pleased with the results for the year (i.e., 15.7%). I want to thank you not only for creating the Snider Method but also for developing the seminar and support system to assist me in implementing it. It's been such a positive experience that I recommended your Method to a friend who's now also become your client and is equally as pleased.
One of the things that really helped me on trade day was to modify the Checklist (Appendix B) to make it even easier to follow, especially when I was new to the process. I've attached a copy of it for your review. It's reformatted with each step now on a separate line (compared to the original Checklist)...still with supporting page references...but with a new checkbox to track my process in completing each step. I even added what I considered an omitted step of "updating Band Rule Worksheets for any assigned puts" in the Sunday Evening Bookkeeping section. (I told Justin Brownlee about this missing step several months ago...so hopefully your staff has included it in your Checklist by now).
I've also revised, rewritten, and reformatted other sections of your notebook, making it easier for me to understand and follow...a habit that I developed from my career as a technical writer and course developer before I retired. If you would like to see a copy of them, just let me know.
Thanks
again.
Phil Alexander
Kim Snider, Kim Snider Financial Communications, Chronim Investments and/or Snider Advisors make no representation that the information and opinions expressed are accurate, complete or current. The opinions expressed should not be construed as financial, legal, tax, or other advice and are provided for informational purposes only. Call 866-952-0100 to request the Snider Investment Method™ Owner's Manual, which includes a description of the Snider Investment Method, investment objectives, risks, suitability and other information. Please read and consider carefully before investing. All investments are subject to risk including possible loss of principal.
