Monday, May 30, 2011

Living Without Limits

"Dream no small dreams, for they have no power to move the hearts of men."

The starting point of great success and achievement has always been the same. It is to dream big dreams. There is nothing more important, and nothing that works faster to allow you to cast off your limitations, than to begin dreaming and fantasizing about the wonderful things you can become, have, and do.
When you begin to dream big dreams, your levels of self-esteem and self-confidence go up immediately. You feel more powerful about yourself and your ability to deal with what happens to you. The reason so many people accomplish so little is because they never let themselves lean back and imagine the kind of life that is possible for them.
A powerful principle that you can use to dream big dreams and live without limits is contained in what Elihu Goldratt calls the "Theory of Constraints." This is one of the greatest breakthroughs in modern thinking. What Goldratt has found is that in every process, in accomplishing any goal, there is a bottleneck or choke cord that serves as a constraint on the process. This constraint then sets the speed at which you achieve any particular goal. But if you concentrate all of your creative energies and attention on alleviating the constraint, you can speed up the process faster than by doing any other single thing.
Let me give you an example. Let us say that you want to double your income. What is the critical constraint or the limiting factor that holds you back? Well, you know that your income is a direct reward for the quality and quantity of the services you render to your world. Whatever field you are in, if you want to double your income, you simply have to double the quality and quantity of what you do for that income. Or you have to change what you are doing to make it worth twice as much. But you must always ask yourself, "What is the critical constraint that holds me back or sets the speed on how fast I double my income?"
A friend of mine is one of the highest-paid commission professionals in the United States. One of his goals was to double his income over three to five years.
He applied the 80/20 rule to his client base. He found that 20% of his clients contributed 80% of his profits. And that the amount of time he spent on a high-profit client was pretty much the same as the amount of time he spent on a low-profit client.
So he very carefully, politely, and strategically handed off the 80% of his clients that only represented 20% of his business to other professionals in his industry. He then put together a profile of his top clients and began looking in the marketplace for more clients that fit the profile. In other words, clients who could become major profit contributors to his organization and whom he, in turn, could serve with the level of excellence his clients were accustomed to.
And instead of doubling his income in three to five years, he doubled it in the first year!
So what is holding you back? Is it your level of education or skill? Is it your current occupation or job? Is it your current environment? Is it the situations that you are in today? What is setting the speed for achieving your goal?
Remember, whatever you have learned, you can unlearn. Whatever situation you have gotten yourself into, you can probably get yourself out of. If your real goal is to dream big dreams and to live without limits, you can set that as your standard and compare everything that you do against it.
The three keys to living without limits have always been the same. They are clarity, competence, and concentration.
Clarity means that you are absolutely clear about who you are, what you want, and where you're going. You write down your goals and you make plans to accomplish them. You set very careful priorities and you do something every day to move yourself toward your goals. And the more progress you make toward accomplishing things that are important to you, the greater self-confidence and self-belief you have, and the more convinced you become that there are no limits on what you can achieve.
Competence means that you begin to become very, very good in the key result areas of your chosen field. You apply the 80/20 rule to everything you do and you focus on becoming outstanding in the 20% of tasks that contribute to 80% of your results. You dedicate yourself to continuous learning. You never stop growing. You realize that excellence is a moving target. And you commit yourself to doing something every day that enables you to become better and better at doing the most important things in your field.
Concentration is having the self-discipline to force yourself to concentrate single-mindedly on one thing, the most important thing, and stay with it until it's complete.
The two key words for success have always been focus and concentration. Focus is knowing exactly what you want to be, have, and do. Concentration is persevering, without distraction, in a straight line toward accomplishing the things that can make a real difference in your life.
When you allow yourself to begin to dream big dreams, creatively abandon the activities that are taking up too much of your time, and focus your inward energies on alleviating your main constraints, you start to feel an incredible sense of power and confidence. As you focus on doing what you love to do and becoming excellent in those few areas that can make a real difference in your life, you begin to think in terms of possibilities rather than impossibilities, and you move ever closer toward the realization of your full potential.
[Ed. Note: If you're not spending most of your time doing what you love, and you're not making the money you know you deserve, chances are you're not exploiting your natural talents.

How to Have Lots of Good Friends

Life is partly what we make it, and partly what it is made by the friends we choose."
Tennessee Williams

By Michael MastersonIt's been said that if you want friends to help you in the bad times, you have to help them in the good times.
That's not true. A truer statement is that friends come in two varieties: those who help you and those who don't.
To some people, the helpers are the better friends. Not to me. I appreciate both equally.
Some folks take great pleasure in helping others. They bring soup to the sick, cross the street to offer directions to a stranger, and show up at funerals. They offer help whether you ask for it or not. They enjoy being helpful. That is who they are.
I have friends like this with whom I spend little time. We share few interests. We travel in different social circles. But I know that if anything bad happens to me or anyone in my family, they will be there.
Others aren't there when you might need them. They are off having fun somewhere else, bringing happiness where happiness is. That is their nature. And I'm fine with that. They are the ones who show up at my office hoping to distract me. To go out for a drink or steal a game of golf.
I value my Good Time Charlie friends because I know that whenever they walk into my office they will make me smile. I don't need them to call me when I'm sick or show up at my house when I'm moving furniture. What they give me is what they are capable of giving me, and that is quite enough.
And I have all sorts of friends besides the Florence Nightingales and Good Time Charlies. I have "work" friends and Jiu Jitsu mates and crossword-puzzle companions and writer buddies.
I cherish them all.
But there is one kind of friend I don't much like. And that is the kind that is always trying to make me into a "better" friend.
You know what I'm talking about. People who want you to be closer to them than you want to be.
They are the ones who get upset if you don't call them on their birthdays. Or if you don't give them as much attention as they feel they deserve.
From what I can see, these people are needy not just in friendship but in every aspect of their lives. They are needy with their lovers. They are needy with their families. They are even needy with their children.
Need is anathema to friendship. Friendship is valuable only when it is freely given and received.
There is a great book on this subject that you might have heard of. It was written by M. Scott Peck, M.D., a modern-day Christian philosopher. The book is A Road Less Traveled.
It's not, as many people think, about marching to the beat of a different drummer. It's about romantic love - why it is a selfish and not a Christian thing. It's about what happens to the soul of a person when he loves his fellow man selfishly.
Romantic love, Peck says, is an improper form of the kind of love that should be given only to God. He is right.
I read an article recently by someone who argued that friendships should be "equal." What he meant by that was that a good friendship is one in which each friend gives the other friend the same amount and kind of attention that he wants for himself.
He said you should think about each friendship in terms of an "emotional bank account." And you should ask yourself, "How many deposits have I made in my EBA with that person?"
This is a bastardization of the Golden Rule. It is another form of neediness. And it is not just immature and dumb, it is dangerous and destructive. It is the primary reason many people can't sustain good relationships. They are always worrying about whether they are getting as much as they are giving.
If you exhibit this kind of behavior in your relationships - business or personal - you will have few that are long lasting.
To me, a good friendship is one that has value to both people in the relationship. The value does not need to be the same and it needn't be equal. It just needs to be strong enough to satisfy both parties.
If you haven't caught my drift, the point I'm making is that good friendships are not balancing acts. You can't be rich in friendship if you are always trying to equalize the relationships or if you besiege your friends with demands they do not want to meet.
I have no interest in getting anything from my friends other than that which I am happy to give them. And I don't want to give them anything I don't feel happy to give.
Furthermore, I don't expect them to give first. When I meet someone who has qualities and capabilities that I admire, I'm happy to take the first step. If they reciprocate, that tells me this is the kind of friend I want to have. If they don't - well, I haven't lost much.
This approach applies to business relationships as well.
In fact, if I had to choose one thing that was the most effective strategy I've ever used to succeed in business, it is this.
I will give you two quick examples:
Last week, I had lunch with a former protege of mine. I had given him some advice that helped him get his business started, and we've occasionally gotten together to talk about the direction the business should take. I told him that he was doing a great job, and that I thought he could keep growing the business on his own. But he said he wanted me to continue helping him - and he wanted to formalize the relationship and hire me as a consultant. With that, he pulled out his checkbook and wrote me a check for $60,000 -"For your first retainer fee," he said.
This morning, in my inbox, there was a handwritten note from a young man who was also a protege of mine. We got his business up and running years ago, and I haven't actively helped him in maybe three years. The note was very kind. He thanked me for helping him develop a million-dollar-a-year income. He enclosed a check for $40,000 as a "token" of his appreciation.
These are the kind of business relationships you can have - rewarding on many levels - if you apply the give-first and don't-equalize philosophy.
Business doesn't have to be a cutthroat affair. It doesn't have to be the kill-or-be-killed environment that you see so often in the movies. It can be that. But if you take Dr. Peck's unselfish "road less traveled," you will be able to enjoy a lifetime of wealth and personally enriching relationships... without fear of bad endings.

The Worst Mistake I Ever Made

"The digital decade is not just about any particular aspect of computing.... The key piece in the center is trustworthy systems, systems that do what you expect on an extremely reliable basis."
Bill Gates
I hope what happened to my Internet marketing business recently never happens to yours...
One morning, I clicked onto one of my five dozen or so product-specific micro-sites... only to find it gone!
I quickly clicked on my other micro-sites. All gone.
Next, a panicked call to my Web hosting service - with even worse results: a recorded message telling me the number had been disconnected.
Holy cow!
In essence, my entire Internet marketing business... a passive income stream generating hundreds of thousands of dollars in sales a year... had been shut down, in a single morning, without warning.
And I had no idea how to fix it - or whether it could be fixed.
I dashed off an e-mail to my website designer telling him what had happened... And that I might need to have him reload back-up copies of the HTML code for all my micro-sites into the domain names.
"What back-up copies?" he e-mailed back a few minutes later. "We don't keep back-up copies."
"But you can transfer the HTML code from the actual live site to a new server," he continued, "as long as you have the access codes to each site."
Access codes? What the heck was that?
Of course, I had never heard of this before. And the only one with those access codes was my Web hosting guy... who had mysteriously vanished from the face of the Earth.
Through sheer luck, everything worked out. And within 48 hours, my small Internet marketing business was back online.
The sites came back up. I found a new hosting service and moved all of my sites to their server.
So how can you prevent a similar disaster in your online business... and what steps must you take to protect your site operations?
Heed my advice...
First, deal only with a Web hosting service where you can reach a real, live person during business hours. In fact, the same advice goes for any service that's "mission-critical" to your business: If a real person at the company won't talk to you, don't use them.
Second, insist that your website designer archive back-up copies for every website or page he creates for you.
Third, have the Web designer give you a copy of the HTML code for all of your sites and pages... and keep duplicate copies on your own hard drive.
Fourth, make sure you - or someone in your office - keeps a record of all user names, codes, and passwords needed to get into your existing websites. Don't just say, "My webmaster has them" or "I can just call the Web hosting company." That won't do any good if you can't reach them.
Fifth, identify back-up vendors for all mission-critical services you use. For me, these include Web hosting... website design... maintenance of my e-list... e-zine distribution... credit card processing... metrics tracking and measurement... shopping cart... autoresponder.
Reason: You don't want to be at the mercy of a single supplier... no matter how much you like them... should something go wrong.
Why are reliability and cost both so critical for the small Internet marketing entrepreneur?
Reliability is key because a failure in a critical service like Web hosting or your shopping cart effectively shuts down your entire operation. If your online sales are $7,000 a week, every day your sites are down costs you $1,000 in sales you can never get back.
Cost is important because of a principle taught by Internet marketing guru Fred Gleeck: Return on Marketing Dollars (ROMD) - the ratio of sales and profits to marketing costs.
To maximize ROMD, it's not enough just to generate a high volume of sales - you have to do it at a reasonable cost. The lower your expenditures, the greater your ROMD for a given volume of sales.
Take Web hosting.
There are plenty of large, reliable Web hosting services that can host your site for fees ranging from $19 to $49 a month per site. While that's fine for the typical SOHO (small office/home office) with just one website, it won't work for Internet marketers with product-specific micro-sites.
Some Internet marketers with multiple products have as many as 100 different websites, one for each product. If you paid $49 per site for hosting, your annual hosting bill would be nearly 60 grand a year... eating up a huge share of your profits

Friday, May 27, 2011

10 Simple Steps to Creating Effective Web Video

"Google loves brands - build one."
David Naylor
Does the prospect of creating Web video fill you with fear? If you've never done it before, it can certainly seem overwhelming.
Well, relax. Because I'm going to walk you through the process.
Why should you be using video on your websites? Because it's highly persuasive. A well-produced video can deliver your message in a way that engages and persuades site visitors to take an action that you want them to take. For example, my weekly WebTV show ( attracts thousands of new viewers each week, many of whom buy various products and services I recommend to them. You can do something similar for your niche, regardless of the business you're in.
The number one key to creating an effective Web video is one simple word: preparation. Unfortunately, most people dive in head first and end up with an awkward, disjointed mess. Preparation may not be the most fun part of the process, but it's critical to success.
Here's a simple, 10-step process you can follow to plan your video:
STEP 1: Decide on the primary purpose and objective of the video. What do you want to accomplish? Is it to sell a product or service? Is it to educate your audience about a commonly misunderstood topic? Is it a product demonstration? Is it to showcase results? The video must have a single overriding purpose, otherwise your audience gets confused. Try and state your objective clearly in one sentence. ("The video will overcome any negative perceptions toward hiring new staff from an online employment agency.")
STEP 2: Who is your target audience? How much do they know about the subject already? What is their background, language, and ability to comprehend? Are they naturally interested in the topic? You would make a very different video for children under the age of 10 than you would for lawyers who specialize in divorce cases.

STEP 3: Decide on how you'll present the topic. Will you use a documentary style? Dramatic? Humorous? Sensitive and factual, or lighthearted and lively? There are other considerations too. Should there be a presenter on screen, or an unseen narrator? Do you want to appeal mainly to intellect or emotion? At one end of the spectrum, you could present the information like an instruction manual - purely factual. At the other extreme, you could persuade the viewer more by feelings, emotion, and entertainment. A balance between the two is usually best.
STEP 4: Plan the structure of the video. It's helpful to think of it as a story. It must have a beginning, middle, and end. The introduction must grab the viewer's attention, the middle should balance emotion and facts, and the end should contain a powerful call to action that can't be ignored.
STEP 5: Work out the best length for the video by boiling down the essence of the message and conveying that in the shortest possible timeframe.
STEP 6: Decide who's going to "own" this project and follow it through to completion. It's no use assigning it to a staff member who's already over-stretched with other work.
STEP 7: Set a deadline. It might be a few hours or days for a simple video, or several weeks for a complex production.
STEP 8: Research and acquire information and elements to include in the video. Do you have any existing footage that could be used? Other elements might include artwork, logos, graphics, music, etc.
STEP 9: Write the script. A script is the blueprint for your video. It includes not only the words that are spoken but a detailed description of the visuals that accompany the words and music. Don't expect to sit down and write the finished script in one session. It will evolve.
STEP 10: It's time to record.
Can you now see the importance of preparation? The recording is the easiest part, where all the planning pays off. Even though it's tempting to jump right in to record a video, there's no substitute for preparation. A properly prepared video will always achieve better results for you than a video that was thrown together quickly.

Thursday, May 26, 2011

Marketers - Beware of the Advice You Are Getting Today

"When dealing with people, remember you are not dealing with creatures of logic, but creatures of emotion."
Dale Carnegie

What I Learned About Selling by Writing My First Sales Letter
By Michael MastersonA little knowledge, they say, is a dangerous thing. And nowhere is that more true than with the Internet marketing industry. The majority of the "experts" out there who are dispensing advice have been in the business less than 10 years. They've seen a slice of a single booming market. But market dynamics change constantly. What worked seven or eight years ago isn't working now.
Marketers with true expertise understand and anticipate change - but they are able to adjust to it because they also understand the psychological factors that make people buy.
That never changes.
If you are an Internet marketer you probably know what I'm talking about. You've read the superficial advice and have been excited by it. But when you tried it, you found that it worked a bit... but only for a while.
One example: I'm sure you've heard that you should test "From" lines because some "From" lines sell better than others.
That's true... for a specific market during a limited period of time. But if you had access to the number of test results I have - from thousands of tests on hundreds of products - you'd know that this "rule" is simply not true on a universal scale. Which makes it questionable at best.
This kind of worthless advice is nothing new. In the old direct-mail days, one marketing guru claimed that the best envelope for a sales letter was a blank #10 with a first-class stamp. He made tons of money selling that and similarly wrong ideas. Perhaps he believed it. Perhaps it worked for him. But I had the advantage of being the creative director of a $100 million direct-mail business. I knew it was silly.
Today, I want to focus on another myth - one that is very popular and thus very dangerous to believe in. I'm talking about the idea that there are only two primary emotions that motivate people to buy: greed and fear.
Marketing gurus who espouse this "fact" say that if you can figure out how to equate your product with avoiding disaster, getting rich, or both, you'll be enormously successful.
The problem with this advice - the problem with all superficial advice - is that it is only partially true. Yes, fear and greed can be big motivators when stimulated the right way at the right time. But it would be a costly mistake to rely entirely on those two emotions to pump up sales.
I used to worship at the feet of fear and greed. Thirty years ago. But then I wrote my first sales letter. And in the process of writing that letter, something happened that smartened me up.
My target audience for that letter was older men - a group that was very different from me at the time. I was attempting to persuade them to buy an investment-advisory product I had come up with. I wasn't sure exactly how to position the promotion. But every time I tried a straight fear or greed approach, it fell flat.
The words I wrote sounded like advertising copy. And that made them feel insincere. The core idea I had was essentially right. But the copy I wrote to express it had no vitality, no intimacy, and, ultimately, no chance of turning on the geezers I was writing to.
I worked on the letter for seven weeks, aided immensely by critical comments I received from JSN, my boss and mentor at the time. At the end of that brain-busting marathon, I'd completely reworked the first draft into something entirely new.
The headline was not only changed. It was eliminated. And the lead was intimate and honest. It did not sound like advertising at all. The body of the copy had all the bells and whistles of conventional copy, but the expression was different. There was nothing about it that pandered to greed or fear.
The emotions I focused on in that letter were subtler. As I recall, the two main ones were the desire to belong and the desire to have your beliefs vindicated. They were emotions nobody in our business was talking about back then. But I knew in my heart they were right. And in the context of that sales letter, they were quite strong.
The letter went on to become one of the most successful ever mailed in the history of investment newsletters. It started a publishing franchise that has produced more than half a billion dollars in sales.
Its success convinced me I was on to something. I would never again be satisfied with sales letters based solely on fear and greed.
With that letter, I learned something important about why people buy. And I have used that knowledge in the 30 years since then to create, edit, or supervise thousands of other sales letters. I have passed it on to the many marketers I have mentored. And now, I am sharing it with you.
The truth is that people buy products and services for a host of reasons. These include not only the desire to belong and the desire to have their beliefs vindicated, but also the desire to be seen as smart, to alleviate shame, and to feel better about themselves. These are emotions that run deep. But you don't see many sales letters making use of them. What you still see too much of are the sledgehammers of greed and fear.
When I teach "advanced" copywriting to members of AWAI (American Writers & Artists Inc.), I cover dozens of psychological triggers that motivate (or de-motivate) buying. These thoughts, feelings, and beliefs are subtler than the grosser emotions. And that makes them more powerful. They touch the reader's heart.
Don't misunderstand me. We can all be manipulated by greed and fear. Politicians, in particular, are cognizant of this. That is how they keep getting themselves reelected.
But to be a great marketer, you must accept the fact that we are all - even the simplest of us - extremely complex beings with all sorts of complementary and contradictory impulses.
Failing to recognize that complexity will limit your growth as a marketer. If you believe, for example, that all men only want one thing - s-e-x - you'll never do a great job of selling products to men. Even products for sexual potency.
If you don't recognize that in the heart of every horny man there is also the desire to be kind, to be thought of as gentlemanly, etc., you'll never be able to speak to your prospects in a subtle way. Every one of your promotions will have only one theme, one predictable headline, and one obvious conclusion.
Let me give you a good example. The most successful current promotion I am aware of is the "End of America," written for Stansberry & Associates. In less than six months, it has sold over 250,000 subscriptions. It will probably keep mailing till it has brought in hundreds of thousands more.
If you just skim it, you might think this sales letter is 100% fear-based. After all, it predicts the demise of America, riots in the streets, and so on.
But when you read it more carefully, you will see that the copywriting genius behind it is provoking quite another emotion - one that is almost contrary to fear.
I'm reproducing the beginning of the letter here. So do this: Read the entire thing without stopping. (You'll notice that I highlighted some of the passages. I'll tell you why when you're done.)
Hello. My name is Porter Stansberry.

A little over ten years ago I founded Stansberry & Associates Investment Research. It has become one of the largest and most recognized investment research companies in the world, serving hundreds of thousands of subscribers in more than 120 countries.

You may know of our firm because of the work we did over the last several years - helping investors avoid the big disasters associated with Wall Street's collapse.

We warned investors to avoid Fannie and Freddie, Bear Stearns, Lehman Brothers and General Motors and dozens of other companies that have since collapsed. We even helped our subscribers find opportunities to profit from these moves by shorting stocks and buying put options. To my knowledge, no other research firm in the world can match our record of correctly predicting the catastrophe that occurred in 2008.

But that's not why I created this letter.
I reference our success and experience with Wall Street's latest crisis because we believe there is an even bigger crisis lurking - something that will shake the very foundation of America.
And that is why I've spent a significant amount of time and money in the past few months preparing this letter.
In short, I want to talk about a specific event that will take place in America's very near future... which could actually bring our country and our way of life to a grinding halt.
This looming crisis is related to the financial crisis of 2008... but it is infinitely more dangerous, as I'll explain in this letter. As this problem comes to a head, I expect there to be riots in the streets... arrests on an unprecedented scale... and martial law, enforced by the U.S. military.
Believe me, I don't make this prediction lightly and I have no interest in trying to scare you. I'm simply following my research to its logical conclusion.

I did the same when I tracked Fannie and Freddie's accounting. The same with General Motors. And Bear Stearns and the rest. And when I began giving this warning in 2006 no one took me very seriously... not at first. Back then, most mainstream commentators just ignored me.

And when I presented my case and exposed the facts at economic conferences, they got angry. They couldn't refute my research... but they weren't ready to accept the enormity of its conclusions either.

That's why, before I go any further, I have to warn you...
What I am going to say is controversial. It will offend many people... Democrats, Republicans, and Tea Partiers, alike. In fact, I've already received dozens of pieces of hate mail. And... the ideas and solutions I'm going to present might seem somewhat radical to you at first... perhaps even "un-American."
My guess is that, as you read this letter... you'll say: "There's no way this could really happen... not here." But just remember:
No one believed me three years ago when I said the world's largest mortgage bankers Fannie Mae and Freddie Mac would soon go bankrupt. And no one believed me when I said GM would soon be bankrupt as well... or that the same would happen to General Growth Properties (the biggest owner of mall property in America).
But again, that's exactly what happened.
And that brings us to today... The same financial problems I've been tracking from bank to bank, from company to company for the last five years have now found their way into the U.S. Treasury.
I'll explain how this came to be. What it means is critically important to you and every American... The next phase in this crisis will threaten our very way of life. The savings of millions will be wiped out. This disaster will change your business and your work. It will dramatically affect your savings accounts, investments, and retirement. It will change everything about your normal way of life: where you vacation... where you send you kids or grandkids to school... how and where you shop... the way you protect your family and home.
I'll explain how I know these events are about to happen. You can decide for yourself if I'm full of hot air.
As for me, I'm more certain about this looming crisis than I've been about anything else in my life. I know that debts don't just disappear. I know that bailouts have big consequences. And, unlike most of the pundits on TV, I know a lot about finance and accounting.
Of course, the most important part of this situation is not what is happening... but rather what you can do about it. In other words: Will you be prepared when the proverbial $@*% hits the fan?
Don't worry, I'm not organizing a rally or demonstration. And I've turned down every request to run for political office.

Instead, I want to show you exactly what I'm doing personally, to protect and even grow my own money, and how you can prepare as well.

...You can challenge every single one of my facts and you'll find that I'm right about each allegation I make. And then you can decide for yourself.
Now ask yourself: "What feelings did I have while reading this?" Certainly, fear must have been there. But what else?
I'm willing to wager that one might have been fascination. ("Who is this person making these bold statements?") One might have been skepticism. ("How do I know I can believe him?") If you are a conservative investor - the target audience of this letter - you would almost certainly have felt validated. ("This guy understands what I know to be true.")
The copywriter and his team were not unaware that these feelings would be provoked.
Go back and reread the highlighted sections. You can see that they indirectly, but repeatedly, tell the reader: "You can trust me. I'm not some doomsayer. I'm a conservative investor, just like you."
And that brings me to the hidden emotion behind this letter: I believe the reason it worked so well is that it evokedconfidence in the reader - not fear!
All the highlighted copy - which comprises half of the excerpt - is devoted to instigating trust. Trust that the speaker is a reasonable person. Trust that he has a good track record. Trust that he's not going to ask the reader to do anything that will make him feel uncomfortable (such as marching in the streets).
This leaves the reader with the feeling that he most desires: confidence. The confidence to believe that he has just found someone who might lead him away from the fear he has already been feeling.
By the way, there is a video version of this promotion. If you saw it, you would remark how calm and confident Porter's voice is. There are no histrionics in his presentation. He knew what he was doing. He was speaking like a surgeon who was going to cut the tumor out, not some crazed street screamer shouting out doom.
Since this sales letter became a big hit - and the video went viral - there have been many knock-offs. They all do a great job of imitating the fear. But none of them do what they really need to do: Stimulate confidence.
So the next time someone tells you it's all about greed and fear, remember today's essay. It may be the most important marketing lesson you will ever learn.
One-trick (or even two-trick) marketers seldom make it to the top. And if they do, they don't stay there. If you want a long and powerful career (and it doesn't matter what you're selling - a product, a service, even yourself), you need to recognize the complexity of your audience and treat them accordingly.

"The love of truth has its reward in heaven and even on earth."
Friedrich Nietzsche
Satyagraha, Your Secret Marketing Weapon 
By Daniel Levis
The word Satyagraha is a combination of the Sanskrit words Satya and Agraha. Loosely translated, it means "Truth Power."
Satyagraha was popularized by Mohandas Gandhi during his fight for Indian independence. It became synonymous with the use of civil disobedience as a political tool.
Gandhi believed that truth had great moral power to galvanize resolve against an oppressor, while also garnering support from the rest of the world. And history proved him right.
A young black minister in America studied Gandhi's struggle and ideas and was profoundly influenced by them. He used Gandhi's Satyagraha precepts to achieve a similar human rights triumph here in the West. His name was Martin Luther King Jr.
In both cases, people from around the world with no direct interest in the conflict sided with the freedom fighters. Unyielding non-violent revolt in the face of violent counter-reaction was shocking. It seized global attention and sympathy.
Eventually, these outsiders - bound to the protestors by nothing more than their humanity - put unbearable pressure on those they perceived to be outside of the realm of truth. And justice was served.
These watershed moments in history prove that human nature has a built-in recognition and appreciation for what's right and just and true.
And it seems to me this core kernel of Satyagraha has broad application to sales and marketing.
In times of over-communication and intense battle for consumer mindshare... brutal,
uncompromising truth has enormous attention-getting power...
One of the fathers of direct-response advertising built his entire career on this fact.
His name was John E. Powers. In 1880, Powers was earning $100 a day as a freelance copywriter, an enormous sum at the time. And his ads often worked like gangbusters. Why?
This was the first golden age of advertising. The industrial revolution was sweeping the developed world. All manner of time- and labor-saving conveniences were making their debut. And John Wanamaker had just invented the department store.
By the late 1800s, newspapers and magazines had become stuffed with advertising, with each advertiser trying to out-gun, out-claim, and out-hype the next.

Powers's approach was so novel and rare it was shocking: Tell the Truth.
One of Powers's headlines read: "We have a lot of rotten gossamers we want to get rid of..." Another famous ad announced: "We are bankrupt. We owe $125,000 more than we can pay, and this announcement will bring our creditors down on our necks. But if you come and buy tomorrow, we shall have the money to meet them. If not, we shall go to the wall."
The sad truth is that most marketers lie through their teeth. Somehow, this has become accepted, part of the game. It's just what marketers do.
Clever flim-flam artists know what their customers want to believe, and they twist the truth to give it to them. The even sadder truth is that in many cases this actually works, at least in the short term. And the saddest truth of all is the toll this approach takes on the trust of the consumer. The honest eventually get tarred with the same brush as the abusers. And everyone loses.
The answer, of course, is: Tell the Truth. The truth the flim-flam artists are so cleverly hiding. The truth that proves beyond a shadow of a doubt you're here to create real value for people and win/win relationships capable of withstanding the test of time.
Let there be truth...
Here are a few practical ideas for cutting through the clutter, gaining attention, and inspiring trust in today's cynical, over-communicated world:
Amp Up the Transparency - Show your customers the inner workings of your business, the good, the bad, and the ugly. If the truth is untellable, fix it. Rectify what's wrong with your business. Trust is such a rare commodity these days. Start looking at it as a competitive weapon.
Reveal Your True Motivations - Tell people the real reasons you created this product... why you priced it the way you have... why you need them to order right now. Don't be afraid to reveal what's in it for you as well as what's in it for them. A sale is a transaction where both parties should win.
Avoid Unsubstantiated Hype and Exaggeration - There is a difference between delivering honest, heartfelt enthusiasm and spouting baseless, over-the-top claims. The former, when backed up with sound reasoning, leads to conviction. The later demands even more lies and obfuscation to maintain.
And as we all know, sooner or later, a business built on lies falls down like a house of cards. If your product or service doesn't make your heart race with breathless excitement about what it can actually do for your customers, work on it until it does.
Commerce is a relationship. When you harness Satyagraha - openly revealing your vulnerabilities, imperfections, and limitations as a seller in an interesting and dramatic way - you quickly build a bond of trust, even affection, with your market.

Beware of False Perceptions

"Reality is the leading cause of stress amongst those in touch with it."

Recovered memory syndrome (RMS) is a phenomenon whereby a questioner "helps" someone remember events that may be fictional by asking leading questions. The reason such questioning works - in bogus molestation cases, for example - is because the mind is very susceptible to suggestion.
But RMS is just one aspect of a much broader problem - the consequences that tend to flow from any kind of false perception of reality, no matter what the cause. False perceptions brought about by RMS are the result of what we commonly refer to as "brainwashing" or "the power of suggestion."
Interestingly, good advertising and good salesmanship use this same tool to try to guide consumers' perception of reality. If successful, it can result in sales, to be sure. But it also can result in dissatisfied customers if such customers later believe they were misled.
Action is the starting point of all progress. But an accurate perception of reality is the foundation upon which a successful person bases his actions. A false perception of reality leads to false premises. Which, in turn, leads to false assumptions. Which, in turn, leads to false conclusions. Which, ultimately, leads to negative results.
If, for example, a batter perceives that the pitcher has just released a fastball, but in fact the pitch is a curve, there's a high probability he's going to swing and miss.
The point is that the roots of success are planted in one's perception of the world.
The late conservative economist Henry Hazlitt once wrote that an entrepreneur's success is to a great degree dependent upon how accurately he can predict the future. And, though the entrepreneur may not consciously think about it, those predictions are based on his perception of reality.
I've seen one case after another of a person having a warped perception of what he brings to the negotiating table, which usually results in his walking away empty-handed. Homeowners are often guilty of this kind of self-delusion when they harbor an inflated perception of the value of their houses.
False perceptions also run rampant in the publishing business. First-time authors usually believe that a publisher will heavily promote their books. Unfortunately, such a perception is pure fantasy. Publishers do not promote books. They print and distribute them.
On the other side of this coin, most first-time authors also tend to believe that they've writtenWar and Peace and that their masterpiece will sell quickly through word of mouth. Again, such perceptions are pure fantasy. An author has a better chance of winning the lottery.

The inaccurate perceptions one can harbor in business dealings are literally infinite. But there is one that is probably more costly than any other. I am referring to what occurs when you become involved in a business deal with someone who is clearly unethical.
An acquaintance of mine had an uncanny knack for becoming entangled with dishonest people. His problem was that he was a romantic. He simply couldn't stop himself from becoming enamored with every guy who crossed his path wearing a fake Rolex. And the more such an all-show-and-no-dough person boasted about his accomplishments, the more mesmerized he became. As you might have guessed, he spent more time in court than he did working on his business.
I can't give you a surefire formula for being able to differentiate between honorable and disreputable people, because I myself still manage to get my body parts caught in the wrong place from time to time. Happily, however, I have noticed two changes in my life with regard to this problem.
First, it happens to me much less frequently. And that tells me that I've improved my perception of people. Second, when I do find myself involved with someone with questionable ethics, I make it a point to exit quickly - even if I have to do so at a loss.
While I said that I can't give you a surefire formula for being able to differentiate between honorable and disreputable people, I can tell you how to increase your odds of becoming involved with an unethical individual. All you need to do to accomplish such a masochistic feat is carelessly confuse your wishes with reality.
This emotional mistake happens most often when your desire to do a deal is so great that you ignore the neon sign on the other person's forehead that reads: "LSCD" - Lie, Steal, Cheat, Deceive. The only antidote I know for avoiding this mistake is to be relentlessly vigilant when it comes to not allowing your desires to override what your eyes, ears, and gut tell you.
All this may seem far removed from the phenomenon of recovered memory syndrome, but it's not. RMS is often nothing more than a false perception of reality brought about by the power of suggestion. And that same power of suggestion, whether it comes from someone else or is self-administered, can lead to false perceptions in any area of life.
Which is why it's incumbent upon you to become adept at distinguishing between reality and illusion. A false perception of reality - regardless of the cause - automatically leads to failure. An accurate perception of reality doesn't guarantee success, but it's an excellent first step in the right direction.
You can't put too much conscious effort into sharpening your perception of reality. It's mentally hard work, but everything worthwhile is hard. The more you're willing to pay the price of vigilance in this area, the more often you'll find yourself enjoying the benefits.

"Writing, when properly managed, is but a different name for conversation."

But What's Next? 
By Drayton Bird
How many geniuses have you met?
I met Charlie Chaplin (very briefly) in 1966 while working on publicity for the film Fahrenheit 451. Then I was lucky enough to work with David Ogilvy for eight years.
Ogilvy still exerts enormous influence in the marketing business, and if you haven't read Ogilvy on Advertising, you should have your wrist slapped.
But there is one remarkable person I never met but wish I had. I surely would have learned a lot from him. That's because he started not one but two groundbreaking businesses - the Franklin Mint and QVC.
That man is Joe Segel. With the Franklin Mint, he pretty much invented the mail-order collectibles business. It was for years pre-eminent in the field, though it has since been bought, sold, screwed up, and run into the ground.
I worked for the Franklin Mint in London in 1976. At the time, many people thought I was the bee's knees at direct-response copy. But I learned a valuable lesson - one you should bear in mind whenever you write or review copy.
A Near-Impossible Task
My first job at The Mint was a letter to sell some medallions celebrating the achievements of the Kings of Belgium. This was quite a challenge. At least one of them - Leopold II - was a mass murderer and slave trader, and few of the others were that impressive.
After laboring on it for a week, I placed the carefully typed product of my consummate genius in front of my client.
He started reading it out loud in sonorous tones. After the heading and first paragraph, he paused, gazed at me over his bifocals, and asked:
"What do you suppose the reader would like to know next?"
Well, you know what? I was flummoxed. I had been writing copy for, oh, nearly 20 years. I had been creative director of a big London agency. My copy had sold a bodybuilding machine called the Bullworker all over the world.
Yet I had never given thought to one simple fact: The minute you have written something, you must ask yourself what is going through the reader's mind.
Good Copy Is Like a Conversation
The great novelist Evelyn Waugh put it very well. He was writing to his wife, complaining that her letters were dull. (Hardly surprising. Unlike him, she was not a literary genius.)
"A good letter," he told her, "should be like a conversation."
Same goes for a good sales letter.
When you write good copy, you "say" something. Then you imagine the reaction in the reader's mind - and respond appropriately.
That was what I failed to understand until my client at the Franklin Mint pointed it out to me.
As my friend Joe Sugarman has said, the only purpose of each line of copy is to make the reader read the next one.
This is immensely important, particularly when it comes to the MOST important sentence in your copy. That sentence is the first one. The headline in an ad. The teaser on an envelope. The start of the sales letter. The opening line in a commercial.
Too many get the reader's attention - but they are "stoppers," not "starters."
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Top Internet marketing expert Brian Edmondson will give you his 12-step plan for launching your business...
Perry Marshall, AdWords guru extraordinaire, will show you how to get a flood of traffic to your website...
Joshua Boswell will give you his personal templates for creating information products in a jiffy (even if you hate writing and have no idea where to begin!)...
Stop letting time slip by. Start your own info-marketing business today!
Five Good Examples
What sort of lines force you to read on? Take a look at these:
  • "Have you ever seen a bald sheep?" (Charlie Kasher's opening to a 30-minute radio spot for a hair-growth product)
  • "Do you lock the bathroom door behind you - when there's nobody else home?" (Bill Jayme's envelope line for Psychology Today)
  • "Cash if you die. Cash if you don't." (WWAV agency's line to sell an insurance product)
  • "Do you believe in life after death?" (About the only decent envelope line I ever wrote - for Save the Children)
  • "If the list upon which I found your name is anything to go by, this is not the first, nor will it be the last, invitation you will receive to subscribe to a magazine..." (Ed McLean's opening for Business Week - the first direct-mail letter he ever wrote)
All of the above compel further readership. But you must have that same desire to keep people reading with every line you write.
Two Old Tricks
Your copy must flow logically. Mine doesn't always.
I've found that it helps to sum up each paragraph with a few words in the margin, and then see if they make sense in sequence.
Another thing that helps has to do with verbal technique. "Carrier" words and phrases - like And, Also, Moreover, What is more, In addition to - at the start of sentences keep people reading. So do questions at the end of paragraphs.
Why is this?
Because you have to keep reading to get the answer.
(The above two sentences just demonstrated what I mean.)
Your Homework
While I was drafting this essay, I spent some time watching QVC. I suggest you do the same. And take notes. Pay attention and write down all the techniques they use. Then see if you are using those techniques in your sales copy.
Here are some things I noticed in just the first few minutes:
  1. They demonstrate - and nothing makes a stronger sales pitch than a good demonstration.
  2. They're friendly and helpful - not loud, aggressive, or in your face.
  3. The whole deal is on the screen throughout the spot.
  4. There's tons of information. They're not afraid to talk at length or repeat themselves.
  5. They use persuasive references - e.g., the fact that a Diamonique designer had created something for Hillary Clinton.
Success does not come from one big idea, but from relentless application to detail. You see this on QVC.
One last thought...
David Ogilvy once told me that the secret of success in the marketing business is charm. And what makes you think someone is charming? They seem interested in you. They listen to what you say. They pay attention.
You must be genuinely interested enough in your readers to try and imagine what is going through their minds - and respond to it.
Then you will charm them all the way to the order form.
Bad copy does not do that. It is written from the writer's point of view, not the reader's.

Tuesday, May 24, 2011

Do You Have What It Takes?

"Knowing is not enough; we must apply. Willing is not enough; we must do."

When you hear about all the folks who are making thousands of dollars a week by selling information products on the Internet... and "working" only a few hours a day...
... it's tempting to want to jump on the bandwagon.
But before you take the leap, it pays to think about whether it is right for you.
On the surface, Internet information marketing sounds like everybody should be doing it. Of course, if that happened, who would fix your car... or trim your hedges... or prepare your tax returns?
But not everybody is going to go into Internet marketing - as attractive as it sounds.
Should you?
Let me start by saying that, as an Internet information marketer, what you will be selling is useful knowledge on a specialized topic. Therefore, if you already possess this specialized knowledge, you are in an advantageous position.
According to info marketer Gary North, most people do, in fact, have some specialized knowledge they can turn into a business.
"You possess a lot more knowledge than you think," says Gary. "In many cases, that knowledge is valuable to those who don't possess it."
If it's not immediately obvious to you what specialized knowledge you possess that other people would pay for, stop and take a personal inventory.
On a sheet of paper, list your formal education... degrees... job history... skills... hobbies... and interests. One or more of the items on that list most likely can be the basis of a profitable Internet information marketing business.
Are you articulate? If you can express yourself well, that, too, positions you for success in the Internet information marketing business. You do not have to be a great writer. You just need the ability to express yourself clearly and concisely.

Another thing that gives you an advantage in this business is a strong desire to make more money than you are now making. That's important, because there are a lot of people who publish online (blogs, articles, books, fiction) without caring if they make money by doing it.
These dilettantes (and I am using the word in its literal meaning, not as a pejorative) post their stuff on the Web and give it away for free. Their reward is knowing that people are reading or looking at their work.
But putting up a website and posting content to it is easy. Getting people to pay you for it is a bit more of a challenge.
An interest in making money from your intellectual property will give you the impetus and motivation to do the extra work it takes to create and sell information products online. (I teach the entire process in my home-study program: The Internet Cash Generator.)
Have you studied copywriting? You do not need to be a good copywriter to have a successful Internet marketing business. But you do need the ability to know whether a promotion written for you by a freelance copywriter is any good, so you can tell the writer how you want it fixed.
If you are a good copywriter, that's a bonus, because hiring top copywriters is expensive - and by writing your own sales copy, you can avoid their fees.
As a subscriber to ETR, you have gotten a lot of articles on marketing. Have you been reading those articles? If so, you have yet another advantage. Because the key to success on the Internet is the marketing, not the content creation.
Quality content is important. But the people who make serious money online do so because they are good marketers, not because they are good writers.
Many people who love to write are enamored with the "creative" part of it, but aren't good at the business side of things. If you go into Internet marketing, you will have to pay more attention to the business side. In particular, you need to know what you can realistically expect in terms of results from your promotions.
You do not need to have an aptitude for math. With Internet marketing, figuring out your return on investment (ROI) is very simple and can be done with a pocket calculator. But you do need to be conscious of revenue coming in and money going out. Starting and running an Internet marketing business does not cost a lot of money, but the cost is not zero.
The one thing you absolutely do not need is experience with computers or technical ability of any kind.
The most important skills for an Internet marketer are (1) marketing, (2) copywriting, and (3) communicating (the ability to create content in writing).
I advise Internet marketers to outsource all the technical tasks. That includes setting up their website, installing their e-commerce software, broadcasting e-mail marketing messages, maintaining their subscriber list, and designing their information products.
You can get people to handle all these tasks at dirt-cheap prices. On websites such and, for example, you can find all the help you need at prices so low they will astonish you.
Even if you can do the technical stuff, I advise you not to.
Because with the limited number of hours you have available each day, you need to spend your time on tasks that give you a maximum return on time invested (ROTI).
The tasks with the highest ROTI revolve around thinking about your business and planning new products and marketing campaigns.
The technical stuff has the lowest ROTI. To be frank, it's a waste of your valuable time. And the less efficient you are in running your Internet business, the more difficult it will be for you to achieve the "Internet marketing lifestyle" - making a six-figure income while working only a few hours a day.
So ask yourself:
  • Do I have useful knowledge of a specialized topic that people will pay for?
  • Can I express myself clearly in writing?
  • Do I have a desire to earn more money from what I know?
  • Can I develop some skill in copywriting?
  • Do I understand the fundamentals of Internet marketing?
The more "yes" answers you gave, the better equipped you are to turn your knowledge into dollars.

Are You Making Money From Soaring Global Energy Demand?

"The future will be determined in part by happenings that it is impossible to foresee; it will also be influenced by trends that are now existent and observable."

By R.J. Sterling
Energy is a topic that dominates the news.
We're constantly hearing about rising prices at the gasoline pumps... the ongoing global war for oil... and the push for cleaner, greener technologies.
Thanks to the soaring demand for new energy sources - fueled by growth in emerging markets - we're entering a historic era for energy investments.
Now with all of that said... let me ask you a simple question:
Without visiting wind farms or getting a degree in geology, how is it possible for an individual investor to make money from this extraordinary trend?
After all - if you're like me, I'm sure you know plenty of people who have lost money by "gambling" on individual energy stocks.
Several years ago, I worked with someone - an incredibly bright guy, Paul K. - who lost thousands of dollars on speculative energy investments back in the early '90s. It wasn't so much that Paul was a bad investor... he just kept chasing the next big oil discovery.
It used to be that making big money in energy was a bit like playing the lottery.
You'd hear about an exploration company that had a good story... you'd plunk down your hard-earned cash... and you'd hope they struck oil.
Every once in a while - at a cocktail party, most likely - you might hear a story from someone who made a killing from an oil strike.
Of course, it was much more common to hear stories about investments that lost money.
But those days are over.
Thanks to a relatively new investment vehicle, you can harness the power of energy investing and make "speculator-sized profits" without visiting a single drilling site.
Let me show you what I mean.
Thanks to the combination of two fundamental shifts, it's possible for individual investors to take enormous stakes in very targeted, specific energy investments... while at the same time limiting their risk.
The first of these fundamental shifts is in the global demand for energy.
Thanks to the explosion in energy demand from countries like Brazil, Russia, India, and China, our global energy resources are being quickly depleted.
And concern over the geopolitical dangers associated with Middle Eastern oil - and the push for clean energy technologies - has helped change the energy landscape in a huge way.
Couple this explosion in energy demand with the second fundamental shift - the change in how investors can profit from specific "pockets" of the market - and you have a true game-changer.
Not that long ago, institutional investors had a clear advantage over the little guy when it came to making money in the markets.
That's because - when their research showed that a particular sector was about to "pop" - they could simply gobble up every stock in that sector.
Individuals like you and me didn't have the resources to do something like that. So we were left to grab a handful of companies and hope for the best.
But that's all changed, thanks to the invention of the ultimate investor's "power tool": Exchange Traded Funds (ETFs).

Now... you might think of an ETF as simply a way to invest in a particular index, like the NASDAQ or the S&P 500.
But the explosion in growth of ETFs over the last five years has created a world of new opportunities... though only a small number of individual investors have figured out how to take full advantage.
What's more - ETFs are the perfect vehicle to help individual investors capitalize on the fundamental shift in our energy landscape.
Now the easiest thing an investor could do would be to invest in a broad-based ETF - like the Energy Select Sector ETF (NYSE: XLE) - that will provide solid returns as the energy sector heats up.
But - if you know where to look - greater profits are possible.
As you know, investing in exploration companies can be a real crapshoot.
Even the successful companies tend to come up empty more often than not... and that can be devastating to an individual investor.
But with carefully selected ETFs, you can take advantage of specific pockets of the energy market.
So long as you're plugged in to the most important trends, this can be an exceptionally powerful tool.
If, for example, the supply-demand picture for natural gas presents an opportunity... you can invest in an ETF that focuses on the natural gas markets.
If you see that soaring demand for alternative energy will translate into life-altering profits for some companies - but you're not sure which company will "pop" first - you can invest in ETFs that are devoted to specific niches of the alternative energy market.
In the last six months alone, you could have made 54% profits from a global energy ETF... 59.1% profits from a Canada-based natural gas ETF... and 31.4% profits from a solar energy ETF.
And I'm sure it's possible that you could have made more by investing in specific companies that struck it rich during that time.
But I also know that I wouldn't want the risk associated with the old "needle-in-a-haystack" approach to energy investing.
That approach didn't work for my friend, Paul K. - and the truth is, it's an approach that works for only a very small number of individuals.
But thanks to the power of ETFs - in particular, the explosion in energy-focused ETFs - it's now possible for you to exploit the unprecedented global demand for energy without the risk of lottery-style investing.
Now it's worth remembering that energy, like all investments, is subject to short-term pullbacks from time to time.
But those pullbacks are very small bumps in the road, as global demand for energy continues to soar. And the liquidity and diversification that ETFs provide help minimize your exposure.

Monday, May 23, 2011

The Road to You Know Where

By Steve Christ | 
Welcome to the Wealth Daily Weekend Edition — our insights from the week in investing and links to our most-read Wealth Daily and sister publication articles. 

We are beginning to learn once again that it’s awfully tough to drive a car with four flat tires.
And no matter how much gasoline Ben Bernanke dumps into the tank, the real economy is running on fumes.
Of course, you would never know this if all you did was watch the price action on the DOW. It’s on a two-year uptrend that would make you believe the engine was hitting on every cylinder.
But like a broken gauge on the dash board, it’s not necessarily an accurate gauge of everything going on under the hood...

Egypt, Libya, and on June 30th, 2011... America!
This video is so disturbing that you may not sleep after seeing it.
It's not too late to prepare... and you will be thankful that you did.
Watch it now while you still have time...

Unfortunately, the Dow is still what most people use to gauge the economy. It’s reflexive.
If the Dow is green, they are happy; if it's red, they are sad.
It’s pathetic, really... But that’s the way the world works for a market of sheep.
Ben’s Illusory Returns
The problem is the two-year run up in the market is, in part, illusory — brought on entirely by Ben Bernanke’s Depression-era playbook. He promised helicopters, and he delivered them.
You see, the markets haven’t returned to levels last seen in 2008 because if the economy has been restored, it has done so because the Fed’s money drops are being put to use in the markets' levitating asset prices. 
That’s one thing the Fed is quite good at — skewing asset prices to the upside with monetary policy. It’s their default setting whenever there is a slowdown. 
The problem is that this time, the monetary pipeline to Main Street is broken. That leaves money sloshing around the markets instead of actually working to boost the economy.
The Fed, in essence, has spent the last two years pushing on a string.
How do I know this? It's pretty simple, really….
After spending over $4 trillion to get this car back on the road, the four wheels that drive Gross Domestic Product (GDP) are still flat.
You may have heard of GDP. It’s the true gauge of the U.S. economy, and unlike the Dow, it can’t be juiced the same way the markets can by waves of liquidity. In a GDP world, you are either growing at a healthy clip or you're not. 
The formula works like this: GDP = C + I + G + (X-M)
In other words, the sum total of our real economic activity is arrived at by adding Consumption (personal and business) to Investments, plus Government spending, plus exports (X) minus imports (M).
That means in order actually grow and substantially increase the size of our economy, we will need an increase in some form from C, I, G, and X.
The Real Gauge of  the Economy is GDP
That’s the equation and it cannot be conned by Central Bankers. In this case, the problems are structural in nature, not monetary.
The first roadblock is the biggest of them all, since Consumption currently accounts for 70% of our GDP.  
In a society buried under debt and beset with high unemployment, growing is going to be pretty tough to pull off.
That’s especially true when income growth is negative and credit is either tight or virtually unwanted. Factor in the high cost of food and energy to the equation, and it’s hard to see how this part of the formula is going to add much real growth. 
Next up is Investments.
At just 10% of GDP, there in is not much to work with here, either, since executives are worried about the uncertain economy still aren't spending as much as they use to...
Despite sitting on record mountains of cash, companies are still nowhere near the levels of expenditures that would be on par with 2008 when Investments made up 15% of GDP.
But wait there’s always government spending, right? Well there used to be...
These days, not so much.

Oil Bull is Back!
Last year, this stock went up 952% before pulling back.
This year, it's on track to go up another 900+%.
This microcap wildcatter struck oil three times last summer. Word has spread of this company's success, and now the Chinese want it...
Drilling season starts in less than one month.

The truth is real government spending has been in serious decline since peaking last fall. And faced with huge fiscal deficits, the call for budget cuts is growing louder and louder every day.
Long story short: Your federal, state, and local governments have fallen down and they can’t get up.
That leaves net eXports to the pick up the slack, which isn’t going to happen, either — not as long as we still buy more form overseas than we sell. 
In essence, we are left with is four structurally flat tires. 
Add it all up [GDP = C + I + G + (X-M)] and the odds are increasing for the economy to end up stuck, broken down by the side of the road — or worse, mired in a double-dip recession.
Of course, don’t expect your friendly local central planner to take any of this lying down. That’s why QE 3 is practically a given at this point. They just can’t help themselves.
After all, the road to hell is paved with good intentions.  
Meanwhile, addressing the real problems facing our economy is much tougher than the path of least of resistance. That’s why precious metals like gold and silver can go much higher from here as the dollar continues to take it on the chin.
And as always, our editors have put together a few of their best money-making ideas for the coming years in this week's top-read articles from Wealth Daily andEnergy & Capital, below.

Is It Time to Buy Silver?

By Jared Levy, Editor, 
Unless you have been hiding under a rock, you probably know that silver has had a major correction over the past week. The precious metal plummeted about 30% from a high of almost $50 an ounce to less than $35 yesterday. This six-day drop is one of the largest since 1983.
Silver has given back just about all of its gains for the past month and some traders are thinking it might be time to get long. But before you run and buy silver, there are a couple things to consider.
Forces That Move SilverThe U.S. Dollar
There are many theories on why this sell-off is happening. Obviously, any real strength or even support in the U.S. dollar will generally be bearish for precious metals like gold and silver. This is mostly because the U.S. holds the largest stockpiles of these metals and they are traded in U.S. dollars globally. Even though gold is more of a recognized currency, they both have sensitivity to changes in the U.S. dollar's value.
The falling dollar has recently leveled out. That means we've seen a small correction in dollar-denominated commodities and metals overall. Earlier this week, the European and London central banks held their rates steady. The ECB also hinted that they may not raise their rates next month either. This is good news for the U.S. dollar.
The dollar traded higher late in the day yesterday and sent other dollar-sensitive commodities like oil and even stocks much lower on the day. Oil had its largest percentage drop in three years. If you don't believe that the dollar is in control here, think again...
For now, it seems that the dollar will continue to be relatively weak. The rally seems more like a short-term bump rather than a long-term trend. Current Fed policy puts general downward pressure on the U.S. dollar.
Gold/Silver Ratio
Then there is the historical ratio between gold and silver. A good "average" ratio of gold to silver is about 55, according to many experts. That means 1 oz. of gold should buy 55 oz. of silver. The gold premium is because there is much more silver on this Earth than gold. Even though silver has industrial uses beyond gold, there is a global desire, respect and currency reserve with gold that silver just does not have.
If that ratio gets extremely high, like 100, that means that silver is cheap relative to gold and may be a good value. If the number is low, silver may be getting overly expensive.
On April 28, the gold-silver ratio was about 30, relatively low. Now the ratio is back up around 43, still low, but not extreme. I'd like to see that ratio above 48 if I were thinking of buying.
Using current gold prices of $1,494, that means a drop in silver prices to $31.12 an ounce. Remember, though, that ratios are a two-way street. That means gold prices can climb, too, putting the ratio closer to its "good average."
Technical formations also play an important role in finding buy and sell points. Looking at iShares Silver Trust (SLV:NYSE), you can see the sharp sell-off on the right side of the chart. In my opinion, it seems that we are nearing a short-term bottom. The lower Bollinger band (gray area) was just broken yesterday, as prices dipped below the lowest level of the band. This is generally an indicator of an oversold condition just before a bounce.
ETFs like the SLV hold actual silver and futures contracts. At present there are about 600 million ounces of silver held by ETFs. When traders begin to sell shares of an ETF like SLV, the ETF may sell silver futures to keep everything in balance. About 6 million ounces of silver have exited ETFs in the past week.
ETFs can also add to the domino effect, both long and short. But remember that stocks usually take the escalator up and the elevator down!
Once the hype settles down and the CME completes its margin increase on Monday, we should see silver prices stabilize. From my perspective, I see $33 as a level I may cautiously begin to buy. If silver breaks below that level, I think support will be around $29 until the Fed decides it's time to cool inflation.
I am sure that Ben B. was feeling quite happy with the corrections in gold, oil and silver this week. Perhaps Americans will feel some reprieve as well..

Sunday, May 22, 2011

You Just Have to Get One Thing Right to Make 693% Returns

"Sometimes it's the smallest decisions that can change your life forever."
Keri Russell

By RC Peck
On May 10, 1775, a single vote would define history.
In fact, the brand-new Continental Congress would never have a tougher choice to make.
If they got this one decision right, they would get everything right.
Get it wrong, and the United States of America would die before it even got started.
The question at hand was this: Who would be the Commander in Chief of their rag-tag army?
They picked George Washington. It was an unlikely choice. After all, he'd never commanded a full army in his life. He hadn't even fought in very many battles.
On the other side of the Atlantic, King George III and Lord North had an equally difficult challenge on their hands. They, too, needed to select a commander to deal with the rebels over in America.
They chose the Howe brothers - one to rule the land battles, the other to rule the sea battles.
History records who got it right.
The importance of the choice of commanders cannot be overstated. It was the one thing that defined the outcome of the conflict.
The amazing thing is this: The Howe brothers won far more battles than Washington did. But, in the end, Washington won the war.
Over the past 15 years of helping rich people in Silicon Valley manage their money, I've noticed something surprising.
Almost all of them think that investing money is complex and dangerous and risky.
But that's not true.
The simple fact is this: There is just one thing that you need to get right.
Just one.
If you get that one thing right, it doesn't matter how many small battles you lose. You will always win the war. Get it right, and you get EVERYTHING right.
And, of course, if you get it wrong, you lose everything.
Most financial advisers and investment professionals don't realize this. Which is why 95% of them can't even beat the S&P 500 over a five-year period of time. They get the "one thing" wrong... and they keep losing the war.
So, what is the one thing you have to get right? It is to understand what "mode" the market is in.
You see, there are two major opposing forces in the market. I call them P1 and P2. When P1 is up, P2 is down. And there is no middle ground.
To win at investing, you just have to pick the rising side... and know when it is going to fall. This can bring you an incredible amount of money. It will grow your wealth in every kind of economy. It will make you rich no matter what technique or approach you use.
There's no sitting around stressing about what the news is reporting. No waiting nervously to see what Wall Street, Washington, or London will cook up next. You determine what "mode" the market is in... place your money on the table... and then sit back and watch it grow.

A classic example of what I'm talking about is the relationship between gold and the US dollar. Look at this chart that overlays the price of gold and the value of the dollar.
If, halfway through 2005, you knew what the mode was, you could have put money into gold and shorted the USD and relaxed. Money would have streamed into your life effortlessly and without risk.
In fact, that is exactly what happened with my clients.
I have a very specific algorithm that tells me what the "mode" is and what P1 and P2 are going to do. It is called L-TEC. Each month, I run this algorithm and it kicks out info on what - and where - the market is going up... or down.
Let me show you how this has played out over the past 10 years. Here's another chart showing actual results. This is not a guess or historical hindsight. It is what my clients actually banked.
That is a 693% increase. Over 10 years, this has made many people millionaires. Money that they did not have to work for... or worry about. It just flowed to them.
Notice that, during that time, there were dips. So you could say that we lost several "battles." But overall, we won the war.
Also, look how the L-TEC algorithm protected our money during the crash of 2008. Yes, we took a hit. But within a couple of months, it was right back up and continued upward.
That's because we got the "one thing" right.
But you don't have to wait 10 years to profit from getting this "one thing" right. Let me show you another example of how powerful it can be in the short term.
I call this the "retirement repair plan."
Few things are more effective at creating rapid profits.
In the summer of 2008, several of the world's largest hedge funds... and two of the largest banks... thought there was a chance to make some good money by shorting Volkswagen shares (VW).
SAC, Highside, Goldman Sachs, Morgan Stanley, Perry Capital, Tiger Asia, Marshall Wace.... and a handful of others... were all in on it.
Before I go on, let me make sure you understand what it means to "short" a stock. You basically borrow the stock from an owner and then sell it on the open market. The hope is that the price of your borrowed stock will fall.
When it does drop, you are required to buy it back from the open market. So you sold high and bought low. That's how you can win on a losing stock.
The point is... you need the stock to drop in price AND you need to be able to buy the stock back to get out of the trade.
Back to my Volkswagen story.
All these hedge fund companies were short on VW stock. They were happily selling their shares at a high price, and with remarkable ease.
What they didn't know - what virtually no one knew - was that earlier in the summer, Porsche decided to begin buying up all the available VW shares.
You see, some clever money manager over at Porsche looked at the market and realized that the "mode" indicated that it was time.
So they bought. They bought with the intent to hold on until the "mode" changed. P1 was on the rise - and until it dropped, there was no reason to sell.
Here's what happened...
When the banks and hedge funds went to clear out their short positions and buy back the stocks, there were no sellers.
The market reacted instantly. Look at this chart...
With that one little spike, Porsche... and others who knew how to get the "one thing" right... made an astonishing fortune. Money in large quantities was made in a matter of a few weeks.
That is how someone like you can wipe out years and years of losses in a single day, week, or a few months, with zero effort.
The trick is getting the "one thing" right. From there, making a fortune is easy.
The banks and the hedge fund managers got cocky and thought they could strong-arm the market. In doing so, they got the "one thing" all wrong. And they lost big.
Remember this... in the world of investing, the smart eat the strong.
For the past 10 years, I've been consulting privately with professionals and executives in Silicon Valley. My job is to help them get the "one thing" right. In all those years, I've never been wrong about a major market move.
My L-TEC algorithm has always nailed exactly when P1 and P2 are going to move. It has never failed to clearly identify the "one thing" that you need to get right.
As you've seen, my clients have netted 693% over the past 10 years. And it is accelerating. This year alone, they are up as much as 79%. Many have double and tripled their money without lifting a finger.
The reason for the acceleration is that money always moves faster when the "mode" is getting close to changing - both before and after P1 and P2 change places.
There has never been a better time to get the "one thing" right. It's time for you to be smart about investing.
Right now, I'm offering ETR readers FREE access to my L-TEC algorithm, even though others have paid thousands for this same information.
I will walk you through exactly how the L-TEC algorithm works. I will leave nothing out and make sure you know where, when, and how to profit.
Just like my existing clients, you'll easily be able to get the "one thing" right.