How Do They Do It?

Have you ever been approached by someone in Asia trying to sell you shares? They're good, aren't they? Very good. Ever wondered how their tips always pay off (until you buy them that is)? Here's how..

Suppose some guy calls you on the telephone saying that he is an investment advisor and that he wants to give you some free share tips so that you can evaluate how good he is.

Suppose he calls you once a month for six months and each time gives you one stock to buy or sell that month and each month his tip comes good - when he told you to buy the stock he picked for that month, it went up and when he told you to sell it went down.

After six months, or maybe less, you might be willing to entrust some money to him to invest on your behalf. It would be at this time you would likely find that the 100% track record does not continue.

Let me explain how it is possible for someone to give investment advice with a 100% success ratio for six consecutive months.

Step 1 - There is someone sitting somewhere with a telephone. He has a list of numbers that has recently been purchased from a firm that supplies leads.

Step 2 - He spends his day on the telephone and proceeds to call the people on his list. Let's say he spends about 10 minute on average with each potential client, which means he can call 6 people per hour (that's 50 people a day, 250 people per week, 1,000 people per month).

Step 3 - So in the first month he calls his 1,000 people and tells 500 of them to buy a certain stock and 500 people to sell the same stock. One month later, the stock will either have gone up or down. Our man then calls only those 500 people to whom he gave the "good" advice to.

Step 4 - He then repeats this process for a second month with a different stock. Again, he advises 250 to buys and 250 to sell.

Step 5 - The third month he is down to 250 people who have now received good advice for two months in a row. And so it goes on, by the sixth month he has about 15 people left on his list who have now received six correct investment recommendations on the bounce.

Hey presto! That's how it works. As you can see, this is nothing more than a numbers game. There is no magic formula being used or superior knowledge being provided.

Source: http://ezinearticles.com/6313574

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