A
AAII (American Association of Individual Investors), 6–7, 224
AAII Journal, 224
AARP, 108
Acampora, Ralph, 143
Account opener, 62–64
Accuracy of sell-side analysis, 140–141, 144
A-class shares, mutual funds, 90, 92
Active management, 89, 100–102
Advertising, online brokerage, 71–74
Advisors
author as, 34, 36–37, 237–238, 240
vs. brokers, 35–37
commissions to, 35
Fiduciary Standard, 35
Registered Investment Advisors (RIAs), 35, 37–38, 74, 237–238, 240
Aleph Blog, 225
Allen, Paul, 211
Allen, Woody, 2
American Apparel, 210
American Association of Individual Investors (AAII), 6–7, 224
Amex (American Stock Exchange), 114–115, 117
Analysis (See Research)
Assets in mutual funds, 82–83, 96–98, 105–107
Assets under management, wholesaler-broker connection, 90–92
B
Baby-boomer mutual fund ownership, 107–108
Bailouts, historic, 14
Barron, Clarence, 81
B-class shares, mutual funds, 90–92
Bear market (2001 to current day), 83–84, 113–114, 234–237
Bell, Scott, 229–230
Berkowitz, Bruce, 101
Bernanke, Benjamin, 168
Bernstein, William, 130
Berrard, Paul, 136–137
Bezos, Jeff, 167
Big Shots and kids in suits, 51–55
Blodget, Henry, 150–153
Blogs (See specific blogs)
BLS (Bureau of Labor Statistics), 140
Blue-collar Wall Street, 41–49
Bogle, John, 68, 82, 102, 108, 117–118
Boiler room sales, 46, 48, 51–58
Booker, Christopher, 166
Boston (open-ended) mutual funds, 80–82
Boston Globe, 79
Brakke, Tom, 158, 226, 229–230
Branch manager, as dolphin, 25–28
Breakaway, 233–240
author’s job as independent, 237–238, 240
brokerage firm changes, 238–240
crash of 2008 and aftermath, 234–237
BRIC investments and storytelling, 168–169
BrightScope, 96
Broke and Broker blog, 227
Broker-advisor incentives vs. client best interests, 31–39
Broker-advisor model, 35–36
Brokerage, retail
boiler room sales, 51–58
broker/advisor incentives vs. client best interests, 31–39
call centers, 55–58
closing anyone, 59–66
cold calling, 41–49, 52, 55–57
historical view of Wall Street, 13–19
investment timing, 7–8
making money, 10–11
other people’s money, 3–11
reputational risk, 11
struggles within firms, 21–30
Brokerage firms
breakaway, 238–240
full service, origins of, 16–18
future of Wall Street, 223–232
generally, 21
Global Research Analyst Settlement impact, 160–161
goal of, 5
Brokerage model, 29–30
Broker-dealer system, historical view, 14–19
Brokers
vs. advisors, 35–37
branch manager, as dolphin, 25–28
broker-sold mutual fund stories, 85–87
commissions to, 35
investment timing, 7–8
preference for mutual funds, 96–97
sales experience vs. investment expertise, 66
as sharks, 22–23
as whales, 24–25
Buffett, Howard, 81
Bull market (1982-2000), 6–9, 98–100
The Business Insider blog, 153
Business Week, 160
Buy and hold investing, 99–100, 164
Buy or die, 23
Buy-side, 139
C
Call centers, 55–58
Campbell, Joseph, 166
Capital in mutual funds, 82–83, 96–98, 105–107
Carret, Phillip, 81
C-class shares, mutual funds, 91–92
CFA Magazine, 158–159
Charles Schwab & Company, 19, 74
Chinese reverse takeover (RTO) stocks, 212–214
Churning, 48
Clients
(See also Advisors; specific topics)
broker-advisor incentives vs. client best interests, 31–39
financial risk, 11
needed to replace lost, 47–48
Straight-Line Pitch to, 173–206
Closed-end mutual funds, 81
Closing anyone, 59–66
Cohen, Abbey Joseph, 146
Cold calling, 41–49, 52, 55–57
“Comedy” story arcs, 165
Commercials, online brokerage, 71–74
Commission (See Expenses)
Commodity product ETFs, 125–126
Common Sense on Mutual Funds (Bogle), 102
Cowles, Alfred, 102
Crash of 1929, 15–16
D
Demographics and mutual funds, 107–108
Discovery, 238
Dot-com bust, 47, 113, 145–147, 151–153
Dow, Charles, 14
Dow Jones Industrial Average, 14–15
Dually-registered financial advisors, 35
Duer, William, 14
E
Exchange-traded funds (ETFs), 113–127
controversy, 124
cost and fees, 116
current numbers and types of, 118–119, 122–126
future of, 229–230
history of, 117–118
how it works, 115–116
introduction to, 113–115
leveraged, 121–122
precious metals investments, 170–171
The Exchange-Traded Funds Manual (Gastineau), 117
Expenses
brokers vs. advisors, 35–37
broker-sharks, 23–24
cold-calling sweatshops, 55–58
discount brokerage, 18–19, 69–71, 73
ETFs, 116
401(k) plans, 116
independent RIA, 240
IRAs, 63
zeroing out, 74–76
External wholesaler, 88–90
F
Fads in investment, 166–168
Fairholme Fund, 101
FDA and biotechs, 215
Fees (See Expenses)
Fidelity Investment Trust, 81
Fidelity Investments, 98, 100, 238
Fidelity Magellan Fund, 98, 100
Financial advisor, as term, 47
Financial risk, client, 11
Financial sector, U.S. GDP share of, 4–5
Financial Stability Board, 118
FINRA (Financial Industry Regulatory Authority), 29, 48, 157
Fixed-income ETFs, 123–124
The Fly blogger, 209
FMR, 18
Forbes (magazine), 227–228
401(k) plans
expense impact, 116
mutual funds in, 83, 92–93, 96, 106
Front-running, 16
Future of Wall Street, 223–232
G
Gandalf, 208
Gastineau, Gary, 117
Gates, Bill, 146
GDP, share of financial industry, 4–5
Geisst, Charles, 15
Gender of stockbroker, 64–65
Gen-X mutual fund ownership, 107
Glass-Steagall Act, repeal of, 47
Global Research Analyst Settlement, 147, 155–161
Gorman, James, 239
Government Accountability Office (GAO), 116
Graham, Benjamin, 227
Great Depression, 16
Greenspan, Alan, 167
Gross, Bill, 100
H
Hamilton, Alexander, 14
Hardy, Thomas, 223
Hedge fund ETFs, 125
Hedge funds and sell-side analysis, 141–142
Historical view of Wall Street, 13–19
History of ETFs, 117–118
A History of Wall Street (Geisst), 15
I
“I don’t like the market right now” objection, Straight-Line Pitch, 182–184
I heart Wall Street blog, 229
I-class shares, mutual funds, 109
“I’d like to watch this recommendation first” objection, Straight-Line Pitch, 190–193
“I’m not liquid right now” objection, Straight-Line Pitch, 184–186
Index Participation Share (IPS), 117
Individual investors, 5–7, 224
Inertia, mutual fund appeal, 96
Infogroup/ORC, 37
The Intelligent Investor (Zweig), 100
“Intelligent Investor” columns (Zweig), 227
Internals, 88
International diversification, 111–112
Internet
online brokerage, 47–48, 69–76
social networking, 133–134
Internet Capital Group (ICGE), 151
Investment (Web site), 225
Investment Company Act, 90
Investment Company Institute (ICI), 105
Investment fads and themes, 166–168
IPOs and endorsement deals, bank, 147–151
IRAs (individual retirement accounts), 63, 106
iShares, 117–118
“I’ve been burned by other brokers before” objection, Straight-Line Pitch, 187–190
J
Jamba, 135–139
Jay-Z, 2
Jobs, Steve, 168
Johnson, Edward C. III, 18
Johnson, Ned, 18
Jones, Paul Tudor, 138
Jung, Carl, 166
K
Knowledge@Wharton (magazine), 148
Kroc, Ray, 130
L
Land speculation, historical, 14
Lee, Spike, 32–33
Legg Mason Value Trust, 101
Lehman Brothers, 44–45
Lehman Method, 45–46
(See also Straight-Line Pitch)
“Let me call you back” objection, Straight-Line Pitch, 180–182
“Let me speak to my wife about this” objection, Straight-Line Pitch, 200–202
“Let me think about it first” objection, Straight-Line Pitch, 196–200
Leveraged ETFs, 121–122
Lindzon, Howard, 235–236
Los Angeles Times, 146
Lynch, Edmund, 16–17
Lynch, Peter, 98–100
M
Malone, John, 167
Massachusetts Investor’s Trust, 79–81
Maugham, Somerset, 237
McClellan, Mark B., 167
Merrill, Charles, 16–17
Merrill Lynch, 16–18, 29, 55–56, 62–63, 150–153, 240
Microstrategy, 145
Miller, Bill, 101
Money (magazine), 82
Money market fund, 17
“Monster, overcoming the” story arcs, 165–166
The Moon and Sixpence (Maugham), 237
“Mountain of Misfortune,” 41–43, 51
Murderholes to avoid, 209–221
Chinese reverse takeover (RTO) stocks, 212–214
one-drug biotechs, 214–216
private placements, 216–221
SPACs (special-purpose acquisition corporation), 210–212
Mutual funds
appeal of, 95–103
active management, 100–102
appropriate uses for, 95
capital in, vs. other investments, 96–98
Lynch’s principles, 98–100
passive management, 102
brochure translation, 109–110
vs. ETFs, 116
historical view of, 77–84
pre-1920s, 77–78
1920s, 78–81
1930s-2000, 81–83
bear market of 2001 to current day, 83–84, 113–114
growth of capital in, 82–83
shareholders, 105–112
wholesaler-broker connection, 85–93
assets under management, 90–92
broker-sold mutual fund stories, 85–87
revenue sharing agreements, 92–93
NASDAQ, IPOs and endorsement deals, 147–151
Nocera, Joe, 82
No-load mutual funds, 80
O
Objections
closing anyone, 59–66
handling excuses, 176–202
objection-rebuttal-power closes, Straight-Line Pitch, 178–202
“real,” 63
One Up on Wall Street (Lynch), 98
O’Neill, Jim, 168
Online brokerage, 47–48, 69–76
Open-ended (Boston) mutual funds, 80–82
Operations, 28–29
Other people’s money, 3–11
“Overcoming the monster” story arcs, 165–166
P
Palagonia, Al, 32–33
Passive management, mutual funds, 102
Pearlman, Lou, 218
Philippon, Thomas, 4–5
Pickens, T. Boone, 167
Piper Jaffray, 137–139
Power closes, Straight-Line Pitch, 202–206
Precious metals investment storytelling, 170–171
Price charts, sell-side analysis, 142
Prince, Chuck, 158
Private placements, 216–221
Products
exchange traded funds (ETFs), 113–127
mutual fund capital holdings, 85–93
mutual fund shareholders, 105–112
mutual funds, historical view of, 77–84
online brokerage, 69–76
Professional investors (See under Brokerage)
The promise
breakaway, 233–240
choice and complexity, 223–232
murderholes to avoid, 209–221
ProShares, 121–122
Q
Quattrone, Frank, 167
“Quest” story arcs, 165
R
“Rags to riches” story arcs, 165–166
Ratings and sell-side analysis, 142
Ratings by investment banks, 145–153
dot-com bust, 145–147, 151–153
IPOs and endorsement deals, 147–151
Merrill Lynch and Eliot Spitzer, 150–153
“Rebirth or transformation” story arcs, 165–166
Regan, Nicole Miller, 137–139
Registered Investment Advisors (RIAs), 35, 37–38, 74, 237–238, 240
Registered Rep (magazine), 45, 216, 228
Regulation
following Crash of 1929, 16
future of Wall Street, 228–229, 231–232
REITs (real estate investment trusts), 219–220
Reminiscences of a Stock Operator (Livermore), 142
Reputational risk, retail brokerage, 11
Research
Global Research Analyst Settlement, 147, 155–161
independent reports, 158–160
ratings by investment banks, 145–153
sell-side analysis, 135–144
technical analysis, 142–143
Research Puzzle blog, 226
Retail brokerage
boiler room sales, 51–58
broker/advisor incentives vs. client best interests, 31–39
call centers, 55–58
closing anyone, 59–66
cold calling, 41–49, 52, 55–57
historical view of Wall Street, 13–19
investment timing, 7–8
making money, 10–11
other people’s money, 3–11
reputational risk, 11
struggles within firms, 21–30
Retirement investments, 63, 96, 106–108, 116
Reuters, 211
Revenue sharing agreements, wholesaler-broker connection, 92–93
Reverse takeover (RTO) stocks, Chinese, 212–214
RIA (Registered Investment Advisors), 35, 37–38, 74, 237–238, 240
Richards, Carl, 225–226
Rotblut, Charles, 224–225
Rumsfeld, Donald, 167
Russo, Patricia, 167
S
Sales pitch
Global Research Analyst Settlement, 147, 155–161
marketing image, 131–134
ratings by investment banks, 145–153
sell-side analysis, 135–144
Straight-Line Pitch, 46–47, 49, 59–60, 63–64, 173–206
Schwartzman, Stephen, 168
Schwed, Fred, 3–4
Scudder, Richard, 80
Sell-side analysis, 135–144
challenges, 141–144
generally, 139
hedge fund impacts, 141–142
Jamba example, 135–139
number of analysts, 140
technical analysis, 142–143
“Send me some information on the stock or your firm” objection, Straight-Line Pitch, 194–196
Series 7 license, 46–47, 49, 57, 61–62
Series 65 or 66 licenses, 35, 47
The Seven Basic Plots (Booker), 166
Seven story arcs, 165–166
Shafiroff, Martin, 44–45
Shareholders, mutual funds, 105–112
Simmons, Gene, 219
Sioux Indian proverb, 68
Social networking, 133–134
Soros, George, 208
SPACs (special-purpose acquisition corporation), 210–212
SPDR (Spyder ETF), 114–115, 117–119
StarMine, 137–138
State Street Bank, 80
State Street Global Advisors, 123
Stock and bond ETFs, 123–125
Stock trading, historical, 14
Stockbroker, as term, 47
StockTwits blog, 235
Storytelling, 163–171
BRIC investments, 168–169
buy-and-hold, 164
investment fads and themes, 166–168
precious metals investments, 170–170
seven story arcs, 165–166
Straight-Line Pitch, 173–206
generally, 173–177
handling objections, 176–202
“I don’t like the market right now,” 182–184
“I’d like to watch this recommendation first,” 190–193
“I’m not liquid right now,” 184–186
“I’ve been burned by other brokers before,” 187–190
“let me call you back,” 180–182
“let me speak to my wife about this,” 200–202
“let me think about it first,” 196–200
objection-rebuttal-power closes, 178–202
power closes, 202–206
“send me some information on the stock or your firm,” 194–196
traditional approach, 45–47, 49
Struggles within firms, 21–30
Suitability Standard, 29, 35, 224, 228
Supershares product, 117
Swedloe, Larry, 68
T
T-class shares, mutual funds, 92
TD Waterhouse, 72–73
Technical analysis, 142–143
Technological advancement, 230–231, 239
Themes and fads in investment, 166–168
Timing of investments, 6–8
Toll, Bob and Bruce, 168
“Tragedy” story arcs, 165–166
Tyson, Mike, 208
U
Unger, Laura, 148–149
“Unity Creates Strength” fund, 77–78
U.S. Bureau of Labor Statistics (BLS), 140
V
van Ketwich, Adriaan, 77
Vanguard, 82, 102, 108, 118–119, 124
Volatility and investment timing, 8–9
“Voyage and return” story arcs, 165–166
W
Wall Street
(See also specific topics)
blue-collar, 41–49
as financial capital of the world, 13, 48–49
future of, 223–232
historical view of, 13–19
Wall Street Journal, 5, 14, 215, 227
Wealth managers, as term, 47
Weill, Sandy, 158
Wells Fargo, 82
Where Are the Customers’ Yachts? (Schwed), 3
Whitney, Meredith, 124
Wholesaler-broker connection, mutual funds, 77–93
Wholesaler’s curse, 89
Willis Consulting, 238
The Winner’s Circle (Shafiroff), 44
Wirehouse brokers (See Brokerage firms)
Womack, Kent L., 148
Y
Yamada, Louise, 143
Z
Zacks Research, 144