BEN CARLSON is the Director of Institutional Asset Management at Ritholtz Wealth Management. He has spent his career helping various nonprofit, institutional, and high-net-worth clients plan and invest their money wisely. Ben is the creator of a popular financial blog and podcast and is the author of several books including A Wealth of Common Sense: Why Simplicity Trumps Complexity in Any Investment Plan and Organizational Alpha: How to Add Value in Institutional Asset Management.

• Introduction 1Chapter 1 No One Sells Miracles 5Goats as Viagra? 7Radio 9The Placebo Effect 10Correlation Does Not Imply Causation 11Same as It Ever Was 13Chapter 2 How to Sell Anything 17The Count 18Selling the Eiffel Tower 20Everyone is in Sales 22Chapter 3 Fast Money 27The Promise of Huge Returns with Minimal Effort 29When Trust Goes too Far 32Do Your Homework 33Chapter 4 It’s the End of the World as We Know It 39Cognitive Dissonance 41The Man Who Walked on Water 43No One Knows What’s Going to Happen 45Why Pessimism Sells Better than Optimism 47The Value of ‘I Don’t Know’ 48Chapter 5 Sleight of Hand 51Bad Brad 53A Magician Reveals His Secrets 56Chapter 6 When Success Doesn’t Translate 61Defeated by Decency 62Don’t Try to Get Rich Twice 66Chapter 7 When Fraud Flourishes 71When There’s an ‘Expert’ with a Good Story 71When Greed is Abundant 73When Capital Becomes Blind 74When the Banking Industry Gets Involved 76When Individuals Begin Taking Their Cues from the Crowd 77When Markets are Rocking 79When the Opportunity Presents Itself 80When Human Beings are Involved 81When Innovation Runs Rampant 82Chapter 8 The Siren Song of New Technologies 85The Railway Napoleon 87The Media’s Role in a Bubble 90The Other Side 93The Silver Lining of a Market Crash 94Chapter 9 The Seductive Power of FOMO 97How to Create a Monopoly 98The Roaring 20s 100When the Tide Goes Out 102Not a Ponzi but Close Enough 103The Seductive Power of FOMO 104Chapter 10 Type I Charlatan 109John Law and the Mississippi Company 111Speculation is a Hell of a Drug 113Pop Goes the Bubble 115Type I and Type II Charlatans 116Chapter 11 Type II Charlatan 121The South Sea Company 123Type II Charlatan John Blunt 124The Bubble Act 127The Echo Bubble and Dunbar’s Number 128Chapter 12 Fooled by Intelligence 131Newton’s Mania 134The Problem with Smartest People in the Room 135Why Smart People Make Dumb Decisions 137Fooling Yourself with Complexity 138Chapter 13 How Gullible are You? 141Ponzi versus Bernie 146The Sacred Relationship 148Chapter 14 The Easiest Person to Fool 153Getting Rich versus Staying Rich 156Shot out of a Cannon 157The Biggest Fraud of All 158Conclusion: Six Signs of Financial Fraud 1631. The Money Manager Has Custody of Your Assets 1632. There is an Aura of Exclusivity in the Pitch 1643. When the Strategy is too Complicated to Understand 1654. When the Story is too Good to Be True 1665. When the Returns are Ridiculously Good 1676. When They Tell You Exactly What You Want to Hear 168Index 171

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BEN CARLSON is the Director of Institutional Asset Management at Ritholtz Wealth Management. He has spent his career helping various nonprofit, institutional, and high-net-worth clients plan and invest their money wisely. Ben is the creator of a popular financial blog and podcast and is the author of several books including A Wealth of Common Sense: Why Simplicity Trumps Complexity in Any Investment Plan and Organizational Alpha: How to Add Value in Institutional Asset Management.

• Introduction 1Chapter 1 No One Sells Miracles 5Goats as Viagra? 7Radio 9The Placebo Effect 10Correlation Does Not Imply Causation 11Same as It Ever Was 13Chapter 2 How to Sell Anything 17The Count 18Selling the Eiffel Tower 20Everyone is in Sales 22Chapter 3 Fast Money 27The Promise of Huge Returns with Minimal Effort 29When Trust Goes too Far 32Do Your Homework 33Chapter 4 It’s the End of the World as We Know It 39Cognitive Dissonance 41The Man Who Walked on Water 43No One Knows What’s Going to Happen 45Why Pessimism Sells Better than Optimism 47The Value of ‘I Don’t Know’ 48Chapter 5 Sleight of Hand 51Bad Brad 53A Magician Reveals His Secrets 56Chapter 6 When Success Doesn’t Translate 61Defeated by Decency 62Don’t Try to Get Rich Twice 66Chapter 7 When Fraud Flourishes 71When There’s an ‘Expert’ with a Good Story 71When Greed is Abundant 73When Capital Becomes Blind 74When the Banking Industry Gets Involved 76When Individuals Begin Taking Their Cues from the Crowd 77When Markets are Rocking 79When the Opportunity Presents Itself 80When Human Beings are Involved 81When Innovation Runs Rampant 82Chapter 8 The Siren Song of New Technologies 85The Railway Napoleon 87The Media’s Role in a Bubble 90The Other Side 93The Silver Lining of a Market Crash 94Chapter 9 The Seductive Power of FOMO 97How to Create a Monopoly 98The Roaring 20s 100When the Tide Goes Out 102Not a Ponzi but Close Enough 103The Seductive Power of FOMO 104Chapter 10 Type I Charlatan 109John Law and the Mississippi Company 111Speculation is a Hell of a Drug 113Pop Goes the Bubble 115Type I and Type II Charlatans 116Chapter 11 Type II Charlatan 121The South Sea Company 123Type II Charlatan John Blunt 124The Bubble Act 127The Echo Bubble and Dunbar’s Number 128Chapter 12 Fooled by Intelligence 131Newton’s Mania 134The Problem with Smartest People in the Room 135Why Smart People Make Dumb Decisions 137Fooling Yourself with Complexity 138Chapter 13 How Gullible are You? 141Ponzi versus Bernie 146The Sacred Relationship 148Chapter 14 The Easiest Person to Fool 153Getting Rich versus Staying Rich 156Shot out of a Cannon 157The Biggest Fraud of All 158Conclusion: Six Signs of Financial Fraud 1631. The Money Manager Has Custody of Your Assets 1632. There is an Aura of Exclusivity in the Pitch 1643. When the Strategy is too Complicated to Understand 1654. When the Story is too Good to Be True 1665. When the Returns are Ridiculously Good 1676. When They Tell You Exactly What You Want to Hear 168Index 171

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BEN CARLSON is the Director of Institutional Asset Management at Ritholtz Wealth Management. He has spent his career helping various nonprofit, institutional, and high-net-worth clients plan and invest their money wisely. Ben is the creator of a popular financial blog and podcast and is the author of several books including A Wealth of Common Sense: Why Simplicity Trumps Complexity in Any Investment Plan and Organizational Alpha: How to Add Value in Institutional Asset Management.

• Introduction 1Chapter 1 No One Sells Miracles 5Goats as Viagra? 7Radio 9The Placebo Effect 10Correlation Does Not Imply Causation 11Same as It Ever Was 13Chapter 2 How to Sell Anything 17The Count 18Selling the Eiffel Tower 20Everyone is in Sales 22Chapter 3 Fast Money 27The Promise of Huge Returns with Minimal Effort 29When Trust Goes too Far 32Do Your Homework 33Chapter 4 It’s the End of the World as We Know It 39Cognitive Dissonance 41The Man Who Walked on Water 43No One Knows What’s Going to Happen 45Why Pessimism Sells Better than Optimism 47The Value of ‘I Don’t Know’ 48Chapter 5 Sleight of Hand 51Bad Brad 53A Magician Reveals His Secrets 56Chapter 6 When Success Doesn’t Translate 61Defeated by Decency 62Don’t Try to Get Rich Twice 66Chapter 7 When Fraud Flourishes 71When There’s an ‘Expert’ with a Good Story 71When Greed is Abundant 73When Capital Becomes Blind 74When the Banking Industry Gets Involved 76When Individuals Begin Taking Their Cues from the Crowd 77When Markets are Rocking 79When the Opportunity Presents Itself 80When Human Beings are Involved 81When Innovation Runs Rampant 82Chapter 8 The Siren Song of New Technologies 85The Railway Napoleon 87The Media’s Role in a Bubble 90The Other Side 93The Silver Lining of a Market Crash 94Chapter 9 The Seductive Power of FOMO 97How to Create a Monopoly 98The Roaring 20s 100When the Tide Goes Out 102Not a Ponzi but Close Enough 103The Seductive Power of FOMO 104Chapter 10 Type I Charlatan 109John Law and the Mississippi Company 111Speculation is a Hell of a Drug 113Pop Goes the Bubble 115Type I and Type II Charlatans 116Chapter 11 Type II Charlatan 121The South Sea Company 123Type II Charlatan John Blunt 124The Bubble Act 127The Echo Bubble and Dunbar’s Number 128Chapter 12 Fooled by Intelligence 131Newton’s Mania 134The Problem with Smartest People in the Room 135Why Smart People Make Dumb Decisions 137Fooling Yourself with Complexity 138Chapter 13 How Gullible are You? 141Ponzi versus Bernie 146The Sacred Relationship 148Chapter 14 The Easiest Person to Fool 153Getting Rich versus Staying Rich 156Shot out of a Cannon 157The Biggest Fraud of All 158Conclusion: Six Signs of Financial Fraud 1631. The Money Manager Has Custody of Your Assets 1632. There is an Aura of Exclusivity in the Pitch 1643. When the Strategy is too Complicated to Understand 1654. When the Story is too Good to Be True 1665. When the Returns are Ridiculously Good 1676. When They Tell You Exactly What You Want to Hear 168Index 171

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