Market Review: The Big Con, Revisited

04/14/02 Were we just ahead of the curve? Perhaps…

About a year ago, long-time Daily Reckoning readers will remember, we released a special report detailing some of the more egregious actions of Wall Street’s biggest cheerleaders. We titled the report: THE BIG CON.

Mocked… jeered… even among our own colleagues the report fell on deaf ears. "Nobody wants to hear it," our critics chimed.

Yet, a year after we published, word comes one of the stars of our report, ol’ Henry Blodget has given himself plenty of the proverbial rope… having left an e-mail trail.

As John Mauldin (www.2000wave.com) reports in his weekly e-mail "Blodget was telling people to buy stocks prior to his firm (Merrill) making huge fees from the offering, even as he and his cohorts privately sent e-mails calling the stock a piece of ****."

"Imagine that," my colleaugue Porter Stansberry recently said to me, "fraud and deception in stock market."

Meanwhile, this morning, out of sheer curiosity and a perhaps feeling a bit of shadenfreude, I perused the portfolio of Strategic Investment, the publication whose advice we recommended you follow in our BIG CON report.

Since the report was released a year ago, and under the steady hand of editor Dan Denning, Strategic Investment has helped readers to gains of 45%, 33%, 75% and 60%… not including the huge 100%+ winner some readers pocketed with a put on the Dow.

And of 14 recommendations made since THE BIG CON report was released the portfolio has only suffered one loss (- 27%)…and one small gain (+2%). The rest of the portfolio remains open and resting comfortably in positive territory.

Yet there’s not a cheerleader in sight. "Incroyable…" as they say here in France.

Mais, c’est la vie.

Addison Wiggin,
The Daily Reckoning
April 14, 2002 – Paris, France

P.S. Again, if you’re interested in investment advice consistent with the ideas and insights you read in the Daily Reckoning, we continue to recommend Strategic Investment. If you’re not already a subscriber, click here:

P.P.S. The Dow closed the week down 80 points on the heels of a 205 disaster Thursday. The big board rests this weekend at 10,190. The Nasdaq and S&P also suffered… off 13 and 11 respectively.

You’ll find this week in The Daily Reckoning, and additional Headlines, News and Insights below.

* * * * * * * * * * * * * * * * * * * * * * * * * * *

THIS WEEK in THE DAILY RECKONING
by Bill Bonner

04/12/02 ALMOST TOO WONDERFUL

"…It is still thought that credit is the key to prosperity. But it is the key to prosperity in the same sense that military spending is the key to security: it all depends what you do withit…"

04/11/02 EXTRAORDINARY ERRORS

"…France and the rest of the Allies were victorious in WWII. Germany was the loser… Everybody knows this is true…and yet, if you were to tell a French woman – both of whose sons were killed in the war…and whose husband was blinded by a grenade – that she should celebrate the victory, she would take you for a fool. A third of France’s capital had been used up. Six million men had died. What kind of victory wasthis?…"

04/10/02 LIQUID GOLD
Guest Essay by Brian Hicks

"…The water shortage in the United States has gotten so bad that many oil and precious metals mining companies have switched gears and started drilling for water. Last week, a small exploration company…with an even smaller stock price…announced it has discovered groundwater reserves in Colorado…"

04/09/02 BEYOND NIETZSCHE

"…What is unique about man is his ability to reason. Unlike the tse-tse fly or the wallabee, man can put 2 and 2 together. Working with things that make sense to him, he comes up with 4 more often than not. But, when he applies these same reasoning talents… collectively…using compound abstractions…to other people’s business – 2 somehow becomes 5.245 or a swamp inIndonesia…"

04/08/02 LETHAL, BUT NOT SERIOUS

"…Reason is no rampart against imbecility. Man, with his power of reason, is badly designed. Since he is able to reason, he imagines that the world – and he himself – acts the way he thinks reasonable. As often as not, reason merely leads him intoabsurdity…"

Addison Wiggin

Addison Wiggin is the editorial director of The Daily Reckoning, and executive publisher of Agora Financial, an independent financial research firm based in Baltimore, Maryland. His second editions of international best-sellers Financial Reckoning Day Fallout and The New Empire of Debt, which he co-authored with Bill Bonner, were updated in 2009. His third book, The Demise of the Dollar… and Why it’s Even Better for Your Investments was updated in 2008, the same year he wrote I.O.U.S.A. Read more about Wiggin’s best-selling books here. 



Wiggin is the executive producer and co-writer of I.O.U.S.A. an acclaimed documentary nominated for the Grand Jury prize at the 2008 Sundance Film Festival and the 2009 Critics Choice Award and shortlisted for a 2009 Academy Award. Wiggin is a three-time New York Times best-selling author whose work has been recognized by The New York Times Magazine, The Economist, Worth, The New York Times, The Washington Post as well as major network news programs. 

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