It was several years ago but the lesson still rings true. For years, I was a member of the Downtown Athletic Club in New York City. There were many business functions held there over the years that I attended. Those functions enabled me to meet many well-known successful people. Most were investors as well.

The club is primarily known for the Heisman Trophy which has been awarded annually to the most outstanding college football player since 1936. As a youngster, I met then vice president Richard Nixon. Later on I met many well know athletes, movie actors and business people. More on those people for another story later. Many had very interesting experiences which they related to me and others.

One evening there was a ceremonial dinner that I was attending with a friend who was a well-known movie actor. I would estimate that there were about two hundred people there that evening. Standing next to us was a fellow who was as large as the Downtown Athletic Club building (36 stories). He was a professional football player in the NFL. The three of us had a long conversation which included our “investments.” The movie actor had done well as he related to us due “no thanks to the brokerage industry“ as their advice had cost him and his wife before he did his own analysis.

The NFL player told us of his experience. In the football off-season, he wanted to develop a career for after his football career. He had graduated from a respected university so he went to a large big name American brokerage house for employment.

In my opinion, the huge brokerage house saw him primarily as a potential source of large accounts and commissions. The players earn huge salaries and in the brokerage houses’ opinion are very much in need of the brokerages’ (Yeah  sure, wise, timely and at all times successful investment advice yeah sure!)

He completed the required training program and securities exams. He moved on with the “big name brokerage houses” advice and opened accounts for some teammates. They, like most people were fooled by the advertising, its name and high profile visibility. For our friend it proved to be almost a disaster. He was terribly disappointed and embarrassed with their results!

He explained that he was extremely embarrassed with the losses suffered. He had followed his big name firm’s prime recommendations and they failed.

Having learned his lesson, after the next football season he went to work at a small firm….but moved his chair into the trading room where he could watch what the professional traders doing. For him, it was “enlightening” to say the least! The traders were rarely using their own brokerage house’s recommendations. They knew and he knew?

He said that “for the first time, I was able to consistently make money for my clients by watching what the ‘’pro traders do.”  He would observe what the firm’s professionals in the trading room were doing and had little devotion for their official brokerage house advice.

In our view, we have found that our own analysis of investments and subscription services are the best approach. This NFL player sure found that out.

The Bottom line is do your own research and insist on value…..We expect the next several years to be very difficult for the economy and the stock market.