Case Study 1 – “What a bunch of…”

Bob was having trouble sleeping. Pressure at work, issues at home and
concerns about his elderly and increasingly frail parents were no doubt
contributing factors.i Family and friends repeatedly told Bob he was dealing
with too many complex issues all by himself and that it’s alright to seek
assistance, but he politely declined their advice.ii One early sleepless
morning at about 1:15 AM, Bob’s attention was captured by an infomercial
featuring Tom Sell-Luckiii who spoke about the “pathway to financial
Independence… taking back control of your investments…and beating
the market like thousands of people have done by following the
Calculated Risk Analysis Program (CRAP) developed by Wall Street
guru, Howie Cheatem.iv

Interesting Bob thought, and for only $99, he could get started right
away so he called the number shown on the screen and thankfully got
through just before 2:00 AM when the special introductory pricing
expired.v A very pleasant representative informed him that for an
additional $49 he would receive CRAP and the monthly publication, Risk
Analysis Guide (RAG) which sells separately for $148. What a deal, Bob
couldn’t resist.vi

The next morning Bob awoke in a good mood and anxious to take a…look
at CRAP which downloaded on his laptop overnight. After a couple of
weeks of study and simulated trading exercisesvii Bob was ready to get
started for real. All he need was investment capital which he found by
emptying the family’s “Rainy Day Emergency Fund.”viii

Bob soon became a devoted follower of the RAG and was pleased with
many of his investments. Finally, he thought, someone had cracked the
code to investing and while he may not understand all the research and
analysis that goes into the RAG’s recommendations and the algorithms
embedded in CRAP, there sure seems to be something interesting about
the monthly rainfall in Arizona and the number of new mortgage
applications reported in the Southwest; or the hotel occupancy rates in Las
Vegas and the national unemployment number; or months ending in the
letter “r” and the trading volume on the CBOE. Of course the thought some
of the stuff was a little far-fetched, like the volume of butter produced in
Bangladesh and the number of sheep raised on U.S. farms! But if it works,
who’s to complain?ix

Six months into CRAP, Bob took stock of his performance and for the most
part he was delighted at how adept he was at selecting winning
investments.x While several of his picks had fared poorly, he found solace
in the explanation he read in the RAG about the unimaginable, unforeseen
and unprecedented events that accounted for those setbacks.xi Moreover,
CRAP was being tweaked to take such matters into account in the future.
RAG suggested that aggressive investors should consider investing more
in these “fallen heroes” since they could be primed for a remarkable
comeback.xii

Shortly thereafter, Bob received a package in the mail which contained

“CRAP2” on a no-obligation 30- day trial basis for loyal CRAPpers who
want to take the wealth to the next level. Bob was honored to have been
selected and dover right into the advanced system which advocated the
use of leverage to grow wealth faster and larger.xiii The only problem was
that Bob didn’t have any cash on hand to commit to this new approach,
so he decided to tap the equity in his home utilizing an internet finance
company offering no closing costs.
Then suddenly everything turned for the worst. The market which had been
enjoying a very long and relatively one-directional ascent corrected
severely. All of Bob’s investment plunged in value. He began to worry and
found little explanation or solace in the RAG, beyond statements that
CRAP’s team of financial specialists were continuing to tweak the program
and that surely better times were ahead.

Bob was also offered the opportunity to purchase CRAP’s just-released study
titled “Five Tips for Surviving & Thriving During the Next Great Financial
Crisis.” Bob was confused as the CRAP team had always been so
optimistic.xiv

Bob had kept all of this to himself as he wanted to surprise his wife, which
indeed he did when he told her what was happening. Somehow, she kept
her wits about her and suggested that they immediately seek financial
advice from a professional. Bob was relieved that his wife was so
understanding and level-headed and then he assured her this was all just
a streak of bad luck and with a little more time things would certainly
turnaround.xv

Question:
1. What are your thoughts and impressions relating to the subject matter
associated with each endnote?
 Case Study – Endnotes Key

Answer guide:
-Relate story
-own example
-lesson

1. Sound decision-making (one's ability to objectively “facts” assess situations

or circumstances using all the relevant information and apply past experience)

is more challenging when people are tired and experiencing stress.

**mahirap para sa taong magdecide ng maayos kapag nakakaranas (tired and experiencing
stress.)

2. People may resist offers of help from “well-intended, well-meaning third

parties” - professionals -, but will accept it when they personally ask for
help. Foregoing help may also be a form of information avoidance when
people don’t have the financial or psychological resources to deal with
that information.
*Family and friends repeatedly told Bob he was dealing with too many complex issues all by himself and that it’s alright to seek
assistance, but he politely declined their advice.
*suggested that they immediately seek financial advice from a professional. but no acceptance happened, he still believed a
streak of bad luck and with a little more time things would certainly turn around.
*tumatanggi sila ng help kapag alam nilang may point yung sasabihin ng tao pero kapag sa kanila na mismo nanggaling na need
nila ng tulog tsaka nila tinatanggap yung point nung tao.

3. Celebrity spokespersons relate to and exude trust and confidence in

their audience often influencing them to consider the products or
services they’re endorsing.
*kapag mas kilala ang tao, mas marami silang maiingganyong madlang people
*Parang yung inenvestan nya, optimistic pa rin kahit dami na problema
4. Real or perceived experts may instill credibility and trust even
though their advice has little, if any direct bearing, on an individual’s
personal situation and circumstances.
*Bob’s attention was captured by an infomercial featuring Tom Sell-Luckiii who spoke about the “pathway to financial
Independence… taking back control of your investments…and beating the market like thousands of people have done by
following the Calculated Risk Analysis Program (CRAP) developed by Wall Street guru, Howie Cheatem.
*basta may credibility/position/professional yung tao, magtitiwala ka agad.

5. Deadlines may heighten interest and urgency when before there may
have been little or no urgency.
*Bob had kept all of this to himself as he wanted to surprise his wife, which indeed he did when he told her what was happening.
Somehow, she kept her wits about her and suggested that they immediately seek financial advice from a professional.
*kapag deadline na mas lalong tumataas yung interest and urgency kahit na dati na malayo pa ang deadline wala kang
pakialam.