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In an effort to maintain balance on this list regarding
vendors etc., I just ran upon a wonderful gem from March of
1997 posted by David Cicia to the Omega List regarding
vendors and the tricks they use to separate you from your
money. Read with care.
Patrick White
-----Original Message-----
From: David Cicia <david.cicia@xxxxxxxxxxx>
To: omega-list@xxxxxxxxxx <omega-list@xxxxxxxxxx>
Date: Sunday, March 16, 1997 10:19 AM
Subject: Vendor tricks
A large number of people from this list have asked me for
information
about a certain trading guru whom I have had experience
with, whose
training course I took. I am not responding to any more
requests for
information about this person at this time, for reasons I
have detailed
elsewhere.
However, in my search for answers I have encountered a
number of
unscrupulous and tricky characters trying to sell me on one
thing or
another. The commodity trading field seems to have more than
its share of
such people. Without referring to any specific individual,
I'd like to
share something of what I have learned about assessing
claims and sales
pitches from these people. I'll cover 2 areas:
pycho-manipulation and
ignoring evidence.
1. Psycho-manipluation.
DO NOT underestimate this! We live in a society which is
dominated by
sales techniques and psychological insecurity. Ways to
secretly play on
unconscious emotional and psychological factors have been
thoroughly
studied, systematized and are being actively and
aggressively used. This is
documented in the book Influence, The Psychology of
Persuasion by Robert B.
Cialdini, Ph.D. He, along with others, is teaching a course
called Mind
Grasp to major corporate and business leaders. The ad for
this course says
that you can get your customers to do things against their
better judgment
and even against their own interests, using the techniques
he teaches.
These techniques are used, secretly, by salesmen,
brokers, teachers,
business leaders, clergy, media people, politicians, gurus,
casanovas, and
all sorts of sly people looking to gain an unfair advantage.
Fortunately,
the book tells us what the main techniques are:
a. Reciprocation - the sense of obligation incurred in
return for a real or
imagined favor, which may be way out of proportion to the
favor.
b. Commitment and Consistency - once you are emotionally
invested in a
course of action, however slightly, you find it hard to back
off from it.
You are then hooked.
c. Social Proof - the herd psychology of believing something
because
others, or a group of others, believe it. Testimonials,
hearsay, imitation,
etc.
d. Liking - you are made to feel liked, important, special,
included in
some sort of "family" (or familiarity); or you find yourself
liking the
salesman even though you don't have very much to go on to
justify this
(this is called "confidence" , as in "confidence game" or
con.)
e. Authority - the appeal to defer to someone who allegedly
knows better or
more than you do, or to bow down in some way to a commanding
presence (this
is parental stuff, so the play has to do with manipulating
your "inner
child" who is still unconsciously looking for external
approval or control.)
f. Scarcity - beliefs that there is not enough to go around,
or that it
will go away if I don't get it soon.
You will not consciously know that these techniques are
being used
against you unless you become aware of and work through the
unconscious
emotional factors that they play on, and become consciously
aware of the
techniques and the variety of ways in which they are used.
But you can get
a feeling sense of when they are being used against you by
paying attention
to emotional pulls that you feel in your gut. Some of these
feelings are:
1. needing approval
2. needing security, control
3. fear
4. hope
5. an inexplicable emotional pull
6. a pressing need to take some action
7. etc.
Another good source of insight about this is Carl Sagan's
last book, The
Demon-Haunted World, especially the chapter on "Fine-tuning
the baloney
meter."
My main point is that there is a corollary to the old
adage "If it seems
too good to be true it probably is." You could put it this
way: "If it
FEELS too good, and you don't know why, you are probably
being
unconsciously manipulated."
I highly recommend Cialdini's book. Since I read it I
have had a much
better "bullshit meter." He goes into detail about all the
variations of
the techniques.
2. Ignoring Evidence
I once had a system vendor calling me quite frequently
over a long
period of time, really getting chummy with me. One day I
asked him to send
me a track record of his system, with actual trades. He said
he would be
more than happy to. I never heard from him again.
If something, including a trading system or method, has
any real value,
it can be substantiated OBJECTIVELY by concrete, clear,
unambiguous
evidence. The criteria for evaluating the evidence for a
mechanical trading
system may be somewhat different than the criteria for a
more discretionary
system - but not much. There should be a track record and it
should hold up
to objective means of evaluating it, decided on in advance
of testing and
independent of the system or method being evaluated. The
track record
should be over a substantial period of time of actual
trading, not
simulation.
If I were going to buy a house, I would hire an
independent building
inspector to look at it thoroughly before I signed the
buy/sell agreement.
If I were going to buy a major appliance I would check in
Consumer Reports
for tests on that appliance. It is strange that we would buy
a trading
system or go to a trading seminar or training without
similar investigation
beforehand. Two reasons come to mind:
a. laziness - checking and testing is not easy, and we
want something
quickly.
b. psycho-manipulation, as outlined above. For reasons
unknown to
ourselves, we overlook things we would not ordinarily
overlook, and do
things we would not ordinarily do. (This underscores the
reason not to
underestimate the possibility of psycho-manipulation being
used on you to
influence your decisions.)
Ask the vendor, salesperson, teacher, guru, etc. for
objective evidence
of the effectiveness of what he is offering, based on means
of evaluation
that is appropriate to what he is offering and that can be
independently
verified. If he can't or won't provide this, you have no way
of knowing the
truth or falsity of his claims. If you don't want to put in
the effort
yourself to check and test, you are leaving yourself in a
situation where
you can easily be fleeced. Don't take crap or excuses from a
vendor, or
from yourself!
So, I am sorry that I have not answered your specific
questions about
that specific teacher, but hopefully this information is
more like helping
you learn to fish rather than just giving you the fish - not
that I have
any claim to any great knowledge or insight myself, but just
sharing some
thoughts that might be of help. Just remember, in the
futures business
those fish are likely to be sharks!
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