If you ask about a particular company he has at hand all the information about its management, their sector of business, Price/Earnings ratio (P/E is always a favorite with brokers), growth pattern, cash flow, etc., etc., etc. He will bury you with meaningless statistics and send you beautiful reports, pink sheets, yellow sheets and analyst’s projections. Stop already.

None of this is going to tell that if you buy this hummer will it go up. If you can find out then everyone else knows it too.

Why is he telling me all this nonsense?

When he passed his broker’s exam to become licensed his brokerage company gave him a pat on the back, a desk, a phone and two (2) manuals. Just two.

The first manual is all about the SEC regulations: what he is allowed to say and not say to any customers. If he violates these he will be fired from the brokerage house and maybe suspended as a broker.

The second manual is created by the clearing company (broker). It tells him how to make phone calls, what to say and how to get your money. That’s the name of the game – your money at the brokerage house. Not how much can they make for you.

The third manual. Wait a minute. There isn’t any third manual. It is the most important one and he is never given this type of guidance. The third manual should contain how to make money and even more importantly how to protect your money when (I did not say if) the market or sector in which the investor has money turns down. As sure as the sun will come up tomorrow there will be another bear market and he will let you sit and watch your money go down the tubes.

Brokers are not taught to protect customer’s money. He can’t “watch your account” because the average broker has 300 accounts. Unless you are 7 figures he does not know who you are. When the market is going down you should be in a money market, but this is discouraged by his manager because this does not make the house any money. In fact if a broker encouraged his clients to do this he would be fired.

Here is one statement you will never hear from any broker, “Cash is a position”.

Think about this: If the investor had sold out in 2000 and gone to a money market account paying 2% he would not have lost 40, 50 or 60% of his money during the next 2 years.

What did your broker do?

You as an investor must watch your account because your broker can’t and even if he did he doesn’t know what to do. His company does not care whether you make or lose money.

Until you learn to be a co-broker with your broker you will never make money in the stock market. You must know more than he does because he is not taught to protect you.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know. Copyright 2006 All rights reserved.

Copyright 2006 Albert W. Thomas All rights reserved. Author of "IF IT DOESN'T GO UP, DON'T BUY IT!"