Wall Street WARZONE

New “Warzoners” vs “Happy Conspiracy:” New Game, New Rules! Play By Their “Casino Rules” and You’ll Lose!

by Paul B Farrell, JD, PhD
| | 4/17/2010

Yes, Wall Street and the “Happy Conspiracy” know you are irrational. Moreover, they desperately want to keep it that way! Why? Because they do not want Main Street populated by “informed investors” making rational decisions. As behavioral finance scientist, Professor Richard Thaler makes clear: Wall Street needs “irrational and uninformed” investors. And former SEC Chairman Arthur Levitt punctuates the point: “They know they can make more money off uninformed investors.” Yes, it’s very simple: Wall Street needs to keep investors irrational and uninformed, that way you’re like a dependent child, won’t revolt, and are easy to manipulate and indoctrinate using Wall Street’s sophisticated, self-serving propaganda.

The harsh truth is—if you play by their rules, you will lose. But you can outwit these self-appointed, arrogant gurus and rulers. Solution: Turn the tables on them. How? Very simple: Embrace your irrational nature, go counter-intuitive, be a contrarian, a “super-brain investor,” get on the path of the ‘irrational millionaire,’ join the “Warzoners.” That’s right, stop playing their game by their rules, do everything “wrong” (by Wall Street’s rules!), and you can still get rich, in spirit and even in fact. Take charge. Go your own way. Invent your own game and live by your own rules. Embrace your irrationality!

My first thought in writing this website/blog was “keep-it-simple:” Know your enemy! Focus on Wall Street and its allies in the “Happy Conspiracy.” Expose its goals, strategies and tactics: Total and absolute control of the American mind, your money and markets worldwide. Help investors understand that they cannot beat this machine in a head-to-head fight. Play by “their” rules, and you will lose. Expose their game, how they control the playing field and the rules … how the enormous added new fire-power of quantitative mathematics and behavioral economics has created an arsenal of weapons of mass contro and a highly-leveraged force-multiplier … how they fix the rules of the game … how the odds are against you are insurmountable … and how they will always win, if you continue playing by their rules.

Yes, identify the enemy, their mission, their rules of the game, the virtually unbeatable firepower of their new behavioral finance quants—then it is my conviction that the solution will then become obvious to the reader, or so I thought. Suggest several other great solution-oriented books on how-to increase your odds in the war against the “happy conspiracy.” That message has been delivered succinctly and eloquently many times by the counter-insurgency leaders fighting against Wall Street in this endless war, for example:

– The Battle for the Soul of Wall Street, Jack Bogle
– Take on The Street: What Wall Street & Corporate 
              America Don’t Want You to Know,
Arthur Levitt
– A Random Walk Down Wall Street, Burton Malkiel
– The Intelligent Investor, Benjamin Graham
– How to Win The Loser’s Game, Charles Ellis

There are many others, all echoing the same warnings, similar solutions. Several have been reviewed here. And they all give clues on how to beat Wall Street in a David vs Goliath style battle, without going head-to-head with them.

Warning—you cannot beat them if you’re playing their game

But that strategy never felt right, because all those books share the same basic message: You must play Wall Street’s game by Wall Street’s rules at the Wall Street Casino. That’s your one-and-only alternative in “that” arena. In all those books the solution means learning how-to increase your odds by improving your skills playing their game in a head-to-head contest. It‘s you versus Wall Street, risking your hard-earned money, at their casino, playing by their rules.

Moreover, with the Wall Street War Machine rapidly expanding its quant behavioral finance force-multiplier, the 100:1 odds against you ever winning are also increasing . So, it became more and more obvious to me that the real solution is not to find more sophisticated tools and tricks and techniques on how-to “beat The Street” gambling at their casino. The solution, the only real effective solution, is … stop playing their game by their rules … stop … period.

You’re “irrational?” So, be a “super-brain,” join the “WarZoners” club

In short, American investors must wake up, stop playing Wall Street’s game, stop going head-to-head, stop fighting, ignore their rules. That’s your new alternative. Go a new direction, fast, now, play a new game—your game, your rules. That’s when the Irrational Millionaire and the Super-Brain Investor became obvious as the alternatives.

That conclusion was reinforced in the five years since Daniel Kahneman, a psychologist, won the Nobel Prize in Economics. He got me focused, writing about behavioral finance. Then I began seeing how quickly behavioral finance experts, quant mathematicians and neuroscientists were replacing the psychologists and how they were being conscripted into “combat” roles, working for and with the Wall Street War Machine.

Wall Street wants a war—they win if you fight them

Digging deeper, it also became obvious that Wall Street actually wants a war, but they want it to be their war, on their battlefield, on their terms—because as long as American investors are engaged, fighting their war, on their terms, by their rules, Wall Street wins, you lose. Why? Because they always control the rules of engagement in that war—they control your mind. So in time it became clear that the 100:1 odds favoring Wall Street’s Machine will continue increasing as their power increased, making it increasingly more difficult for individual investors, the little guy on Main Street America, to compete, let alone win in head-to-head combat.

If you continue playing, the average passive investor has little choice but to consciously (or more likely, unconsciously, as happens every day now) accept that you are being manipulated, dominated and controlled by an overwhelming and invincible force. So you just surrender to it and play their game by their rules. That’s the only option Wall Street wants you to see.

Can’t win that war? Go fight a new war—one you can win!

Then suddenly it occurred to me that the war metaphor was incomplete. The nightly news about Iraq’s insurgents reminded me of asymmetrical combat strategies and guerrilla warfare—where small outnumbered and outgunned forces win by attacking the weaker points of a more powerful opponent. U.S. Special Forces have always been equally effective with this strategy.

So a new strategy: If you don’t like the odds of fighting an unwinnable battle against the Wall Street Machine, then stop fighting it—fight your own war, on your own battlefield. You define the rules of engagement, the kind of game you are willing to play, one that suits your personality and lifestyle, one that lets you “be all that you can be,” as U.S. Army posters put it. “Be an Army of One!”

So that’s what this Fourth Part is all about, a pep talk of a different kind, positive encouragement, a nudge hoping you’ll just walk away from Wall Street’s war altogether—stop fighting them. A new game, new way of life. So once again: Forget about fighting Wall Street’s war, you can’t win. Be a rebel. Just stop fighting, take the big plunge, dare to live the life you came here to live, do what you love and the money will follow! You can’t lose. Remember Michelangelo’s words: “The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it.”

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