$137 Million LOST in Widespread Stock Trading Scam

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For those of you who are self-educated in trading stocks and get your information from online sources, you’ve probably seen NUMEROUS advertisements from a company by the name of Raging Bull. Since their inception in 2014, they’ve made numerous claims about helping absolute nobodies become million-dollar stock traders.

At first glance, they appear to be reputable. Their marketing is professional and give off the impression that you’re dealing with a legitimate company. They’re all over the Internet, their website is polished, and supposedly they have numerous testimonials ranging from your average Joe to celebrities such as FUBU CEO Daymond John of Shark Tank fame.

But as with everything you see online, appearances can be deceiving. And earlier this week, the Federal Trade Commission (FTC) has accused them of being an outright scam. From The Washington Post:

“Federal regulators say the company operators have defrauded consumers out of more than $137 million over the past three years. And the coronavirus-fueled economic crisis hasn’t tempered their ‘reckless’ efforts to dupe vulnerable investors, government lawyers wrote in a court filing Monday.

The Federal Trade Commission sued RagingBull.com LLC and the company’s co-founders, Jeffrey Bishop and Jason Bond, in Maryland. FTC attorneys are seeking federal court orders freezing company assets, halting the alleged fraud scheme and awarding relief to consumers, including refunds and restitution.”

 And if you look at the FTC lawsuit itself, some of the claims are quite damning:

“[Raging Bull] touts that Bond is a ‘millionaire trader,’ and [Raging Bull] ads often describe Bond as a ‘self-made millionaire trader.’ This directly implies that Bond has personally made at least one million dollars in trading profits.

However, documentation reviewed by the Bureau do not show that Bond has personally made a million dollars in trading profits and the documentation does not support that he was a ‘self-made millionaire trader’.

To sustain this illegal operation, Defendants have poured millions of dollars each year into their deceptive marketing campaigns, filled with false earnings claims and targeting scores of new consumer victims.”

Other claims made by the FTC include:

  • Denial of refund requests, with great difficult reporting in cancelling online services
  • Majority of income generated is NOT from actual trading results, but from fees for subscriptions and online courses
  • The trading activity purported by Raging Bull has incurred “substantial and persistent losses”
  • Paying a third-party promotor to stage the event at the Harvard Faculty Club to make it appear as if Jason Bond was invited to speak at Harvard Business School

To date, over 220 consumers who have been burned by Raging Bull have taken it upon themselves to submit complaints to the FTC.

Now, in fairness, it is entirely possible for Raging Bull to dispute all of these claims and demonstrate proof that they really make as much money as they say, and in the way they claim to in their advertising materials.

But let this be a warning to you: DO NOT believe every single thing you see online. Aggressively seek out independent, third-party reviews where the writers are not compensated. Ask every trading guru for a VERIFIED trading record and their performance using the trading strategies they claim have helped them become wealthy.

If you do nothing else but that last recommendation, you will safely eliminate 99.99% of so-called gurus.

What do YOU think about this news regarding the Raging Bull scam? Is it legitimate, or does the FTC have their panties in a bunch? Reply to this newsletter and share your opinions with us!

Tech Companies Accelerate Downward Momentum in the Stock Market

So how did the stock market perform yesterday? Let’s take a look at the most important numbers:

  • Dow Jones: -0.35%
  • S&P 500: -0.8%
  • NASDAQ: -1.9%
  • Tech stocks: -2% for Apple, -1.9% for Facebook, -3.2% for Salesforce

MarketWatch attempted to offer some explanation for the selling activity happening yesterday:

US equity benchmarks were brought lower by selling in technology shares, amid renewed buying in some downtrodden sectors, including energy, that have been hit hard by the public-health and economic crisis spurred by COVID-19.

many energy companies also significantly cut their capital expenditures during the crisis, leaving more upside for stocks if energy prices push higher.

Truist chief marketing strategist Keith Lerner has some insights as well, focusing his analysis on the lack of results from the ongoing negotiations around the second stimulus package:

“I think we’re having a bit of a digestion day after hitting new highs… There’s some hesitation because of the stimulus talks, but leadership still shows the market is leaning toward something happening.”

Tik tok goes the clock. Even with the deadline for government shutdown possibly being extended to December 18th, there’s not a lot of time left to give some form of financial relief to Americans who desperately need it. Unless these negotiations actually end up being productive, all of our stock gains could easily be flushed down the toilet.

These “Cleaning” Stocks May Rise Even After the COVID-19 Pandemic

At the start of the COVID-19 pandemic, everyone and their mother was hoarding all of the available cleaning supplies. Bleach, antibacterial wipes, hand sanitizer, you name it. For the first 3 months of the pandemic, every local pharmacy was fresh out of these items and you had to find “other means” for acquiring them.

Barclays analyst Lauren Lieberman argues that the commercial cleaning market will continue to thrive once the pandemic is over, primarily due to heightened concerns of safety and health for consumers. They want to see places “be clean” and “show clean,” in her own words:

“[Lieberman estimates that the institutional cleaning market totaled $30 billion worldwide heading into the crisis.… [Lieberman] expects volumes to remain elevated versus pre-pandemic years, likely by 10% to 20%.

…COVID has hurt smaller players more than larger ones, and the big dominant names may be the ultimate winners. Ecolab is the “clear market leader,” but has only about 12% to 16% of the market, leaving plenty of share up for grabs, especially as small and regional players struggle.

That could be good news, not only for Ecolab, but also for Clorox, Cintas (CTAS), Kimberly Clark (KMB), Procter & Gamble (PG), and Reckitt Benckiser (RBGLY).”

Interesting stuff! I’ve also noticed the same trend, as many traditionally unheard-of companies have exploded in share value this past year and may continue to do so for the foreseeable future. Perhaps their growth will slow down, but the increase in demand for their products will likely be permanent.

One 10-Year Dividend Investment Generated 550% in Total Returns

The Motley Fool has recently paid an awful lot of attention to dividend investing. They always have their hands in several assets, but dividends are now going to be a major focus for them going forward.

Jason Hall, the host of Motley Fool Live, recently explained how a single investment into a dividend stock has paid off very handsomely for him over the past 10 years:

“The stock that I’ve owned the longest that I bought, specifically, because of its track record is a strong, dividend investment is Brookfield Infrastructure. It’s Brookfield Infrastructure Partners, BIP. You go back over that same since 2010 period, Brookfield Infrastructure Partners stock price has still done well, 288% in stock price appreciation is pretty good.

Brookfield Infrastructure owns the hidden assets that make the modern world work. Like natural gas, transmission, power transmission, water utility, ports, toll roads, fiber optic telecommunication, and stuff like that. It’s these big, expensive, steady cash flow assets that they’re like oxygen.

But here’s the thing, now, you look at the total return, and Brookfield Infrastructure has done quite well, almost 550% in total returns… You’re looking at a dividend yield that has consistently been around 5% over that decade. There has been some peaks and valleys and that sort of thing.”

I really want to emphasize how he held on to this stock for TEN YEARS in order to generate a significant amount of cash flow. It’s certainly a winning investment, but only because he had the balls to hold on for that long and not play the day-trading game.

Dividend investing 100% works, but it is not for the impatient and impulsive. It requires a lot of upfront research to pick the right companies, and an awful lot of time to consistently put enough money in them until the dividend payments add up to something worth bragging about. Keep this in mind before you get excited at the numbers!

Retired Early with $2.25 Million at Just 28 Years Old!?

Yet another example of extraordinary financial success at a very young age has landed on my desk. And in my never-ending quest to equip you with the best information on accelerating your path towards prosperity, I had to share it with my readers.

The Money Habit writer JP Livingston (a pen name) was profiled by CNBC to explain how she managed to save up $2.25 million and retire early at the ripe age of 28 years old:

  • Got self-educated at the age of 12 with the book “Rich Dad, Poor Dad”
  • Graduated college in 3 years instead of 4, saving an extra year of tuition and gaining an extra year of income (~$150,000 net worth swing)
  • First job after college was at an investment firm that paid her $100,000 total ($60,000 base salary plus an end-of-year bonus)
  • Made mid-six figures by the time she retired due to several raises
  • Stashed 70% of her income while working, building up a portfolio of 60% in savings and 40% in investments

Today, she lives off of $65,000 per year with her husband in a 325-square-foot apartment in NYC. And her secret to saving such a high amount of money per month is quite simple:

…viewing your purchases in terms of units of your time rather than dollars. So instead of saying a new unlocked iPhone costs $800, you might do the math to figure out it would cost you 60 hours of work, or a week and a half of your life.”

While her success is extraordinary, keep in mind that these are VERY extreme circumstances. Not everyone will be able to work in an investment firm offering high bonuses and numerous laid-out opportunities to get a raise.

And saving 70% of your income requires some very challenging sacrifices, not to mention an inhuman amount of discipline and super-precise tracking of all your finances.

What do YOU think about JP Livingston’s story? Does it sound believable at all, or does her pen name allow her to “hide” otherwise important details? Reply to this newsletter and share your opinion with us!

To Recover from the COVID-19 Pandemic, “Tax the Rich for the Next 5 Years”

I’m not in favor of applying higher taxes on the wealthy. Not because they shouldn’t be paying their fair share back to the government, but because those kinds of penalizing rules only incentivize their efforts to find additional legal loopholes that help them to actually pay less.

But the United Kingdom’s Wealth Tax Commission has made a suggestion that may be useful for getting the country out of the economic crisis caused by the COVID-19 pandemic. From Forbes:

“A group of over 50 tax experts have called for a ‘one-off’ wealth tax lasting five years to pay for the cost of coronavirus.

Any household with a net wealth of £500,000 ($671,758), including property, business and investments would pay 1% of their wealth every year for five years

…in an October poll by Ipos Mori, nearly half of Britons said they were in favor of tax increases to pay for the cost of COVID-19, with a wealth tax being the most popular solution.”

However, there are arguments against this proposal. Some say that higher taxes would lower any motive for wealthy business owners and entrepreneurs to move to the UK. And of the ones who are already there, they will have a reason to move to another country where lower tax rates exist.

Nobody has officially put down a bill or a proposed law for such an initiative yet. I would suspect that even an announced INTENTION to put this kind of tax in place would make rich households very uneasy. Because if there’s any one thing the rich hate doing, it’s paying taxes.

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