Saturday, October 6, 2012

Ever wonder how much do pundits get it right?

There are pundits everywhere, predicting things left and right, on variety of arenas... politics, finance, and sports.

Now there is Pundittracker... so we *know* if they are actually any good.

For example... on financial pundits... Barron's annual roundtable has an A rating... while Jim Cramer has a D rating on accuracy.

You can also let the folks at pundittracker know what to track, who, and the issues.

So go check them out.

Friday, October 5, 2012

MLM Basic: What is a buying club, and why MLM is NOT a buying club

English: The interior of a typical Costco ware...
English: The interior of a typical Costco warehouse club store. This is the apparel section of the warehouse in Mountain View, California. Photographed on October 9, 2005 by user Coolcaesar. (Photo credit: Wikipedia)
Very often, a suspect scheme's supporters will claim that they are a "buying club", where people can get things for a discount, and thus, membership in this "club" can be sold as a product. Then they cite "CostCo" or Sam's Club as examples.

This is a myth, and I will refer to a real lawyer's opinion on this. This lawyer is Spencer Reese, half of "Grimes and Reese", famous MLM lawyers. They know what they're talking about. You can see the link at the end.

If the company fits the following criteria, it is a buying club in fact, and thus, must follow buying club laws:

(1) Is the organization a corporation / Partnership / Unincorporated association / Other business enterprise?
(2) Is the enterprise organized "for profit"?
(3) Does the enterprise have "members"?
(4) Is the primary purpose of the enterprise to provide benefits to members (i.e., discounted goods or services)?
(5) Do these benefits result from, or are they promoted as stemming from, the cooperative purchases of goods or services?

Note that there is NOTHING in here about "making money" or "income". Indeed, you don't join a "buying club" to make money... You join a "buying club" to "save money" from purchases by leveraging the buying clout of the club.

Therefore, any comparison of a buying club to an "income opportunity" is already bogus.

Thursday, October 4, 2012

Cognitive Bias: Anchoring Effect

Dan Ariely speaking at TED
Dan Ariely speaking at TED (Photo credit: Wikipedia)
Most questions we need to answer in life are not simple yes/no questions. Usually, there's a degree of uncertainty, and if the question is phrased in a certain way, it can influence the answer.

For example, take a look at a discount clothing store (ROSS, TJ MAXX, Marshalls, Burlington Coat Factory...)  and you see a certain item with three prices, the two higher prices having been crossed off. Do you think you got a bargain? If you accept that the highest price is what the item's worth, absolutely. That highest price is the anchor, and you have just been subjected to the "anchoring effect".

Anchoring effect usually applies to numbers. Dan Ariely in a study dated 2008 said that even just writing down an arbitrary number would "anchor" that person. Their experiment is to have people write down the last 2 digits of their social security number (for non-US people, this is much like national ID number), then try to name a price they would pay for a particular vintage of wine. Perhaps not so surprisingly, the people with higher social security number is willing to pay more for the wine, even if they know nothing about the wine.

And scammers knows everything about anchoring effect.

Wednesday, October 3, 2012

ID NEEDED: Is this man your Zeek Sponsor? is asking if any one was sponsored by this man in Oregon into Zeek Ponzi, who may have ran a scam involving investment in emeralds. This person is "Jack Junior Phillips", aka "Jack Phillips".

However, this is not one hundred percent certain that the two scammers are the same person or not.

Any one with more information on this person is encouraged to submit verifiable information by clicking the link below

Tuesday, October 2, 2012

Cognitive Bias: Conditioning (and I don't mean your hair)

Conditioning, i.e. Pavlovian conditioning, is a simple training of a mind to associate stimulus, and response. It is the way we learn ANYTHING, and it is used by people both good and bad.

If you don't remember Pavlov, he's the guy who did the dog experiment. The dog is fed, but before they are fed, they are always subject to this ringing bell. After a while, the dogs are salivating just at the ringing bell, not the actual food.

Humans are exactly the same way, except our "stimulus" (input) and "response" (output) is somewhat more complex. Our conditioning can be at a more "subconscious" level that we may not recognize it without deeper analysis. One example is the placebo effect, where the body learned to medicate itself (usually for pain relief) without the use of actual drugs or surgery.

Scams and cults use conditioning to have you believe that whatever the "leader" said must be true, and you are not to question whatever the leader said.

Monday, October 1, 2012

Bad Argument: Apophenia and Patternicity

Have you ever looked at some things in nature, and decided there is meaningful pattern there, even though there was no proof there actually is?

For example, if the stock prices went up, down, then established a new all-time high. Is that a signal for what will happen the next day?  Ever looked at "candlestick charts"?

How about "streaks" in gambling? Do you think having hit three "greens" in a row on roulette is some sort of a pattern?  Is it MORE or LESS likely to hit another green?

How about finding religious symbols where you didn't expect any, like on a piece of toast, or on glass panel or even a wood door?  Do you see Jesus or Virgin Mary and such in odd places?

Skeptic Michael Shermer
Skeptic Michael Shermer (Photo credit: Wikipedia)
If so, you have "apophenia" coined in 1958 by Klaus Conrad, that described the way mind sees patterns where there is none. Noted skeptic Michael Shermer coined the term "patternicity" in 2008 which means "the tendency to find meaningful patterns in meaningless noise". They are essentially the same thing.

In other words, you are ascribing meaning to things that don't have any, or you're ascribing more meaning than it really says.

Scammers knows this, and are known to use "priming" to "suggest" patterns to make you see data THEIR way instead of alternate, and far more reasonable explanations.

Sunday, September 30, 2012

Irresponsible Statements: Someone else said it (ain't my problem)

Ever read a "supermarket tabloid", with tabloid journalism which almost always involves sensationalism? Here's one example:

Yes, this one is a bit old, but you get the idea what sort of stuff's printed in such tabloids.

Do people sue them for defamation? All the time. Most of the time the tabloid can prove that they got the info from somebody and thus they are simply "reporting" what somebody else said. Thus, they are covered. Whether it's true or not is not their problem.

This is almost at complete odds of a "real" newspaper who actually research the information to make sure it is reasonably true before printing it. And even then, some newspapers are taken by hoaxes and had to issue corrections, apologies, and such.

Unfortunately, much of the information, esp. when it comes to income opportunities, are of the tabloid type, not the newspaper type, in that people will simply reprint / retweet / repost what someone else said, without checking whether it's true or not. And with the proliferation of social networks, tabloid-style info is spreading faster than ever, even though the fact-checking to defeat tabloid-style info is easier than ever.