Cassandra Does Tokyo is a former hedge fund manager and ex NY Trader, who is now living abroad.

~~~

Does Your Financial Guru or Doomster Resemble A Cult?

Does your financial Guru or Doomster resemble a cult? To satisfy your curiosity, it might be worth taking  simple test that will give you an idea whether what you thought was innocent objective altruistic financial advice and unbiased analysis is actually something more nefarious that wants to control your mind, your trades, and empty your bank account.

1. Does your Guru always make out like he’s right?

2. Does you Guru paint a picture that the other [non-disciples] are always wrong?

3. Is there any exit from the Guru’s philosophy without following the philosophy?

4. Does the Guru’s group use its own “Cult-speak”?

5. Does “group-think” dominate, suppressing dissent and enforcing conformity of thinking?

6. Is Guru’s advice irrational at times, contradicting previous or other tenets of Guru advice?

7. Does Guru’s philosophy suppress disbelief?

8. Does Guru’s philosophy denigrate competing ideas, schools of thought, and other Guru’s?

9. Does Guru make personal attacks upon critics?

10. Does Guru believe non-followers need “fixing”?

11. Does Guru insist that his interpretation is the only correct way?

12. Does Guru and his disciples make you feel that by following you are “special”?

13. Is Guru’s philosophy an unquestionable dogma, sacred science, or infallible ideology?

14. Does Guru’s philosophy appeal to perceived unquestionable authorities ?

15. Does following Guru confer a feeling of “instant community”?

16. Is your Guru inconsistent and does he speak contradictory messages?

17. Does your Guru use personal testimonies of the success of earlier converts to validate advice?

18. Is your Guru self-absorbed?

19. Are there potential dual purposes, hidden agendas, ulterior motives, in Guru’s advice?

20. Does your Guru readily admit when he is wrong?

21. Does your Guru undertake deceptive recruiting and/or aggressive promotion?

22. Does your Guru’s ideas implant phobias and self-doubt into your psyche?

23. Is Guru and his disciples money grubbing?

24. Are you pressured to change your beliefs and adopt the Guru’s beliefs?

25. Does your Guru hold ideology and dogma higher than experience, probability and logic?

26. Does your Guru ascribe unexplained or contrary events to mystical manipulation?

27. Does your Guru demand your faith, trust (and money?)

28. Does your Guru use thought-stopping language and thought-terminating cliches and slogans?

29. Does Guru use affiliate front groups, hidden promoters, or disguised propagandists?

30. Does your Guru imply his belief equals truth?

31. Does your Guru make use of double-binds?

32. Is your Guru held accountable for his performance?

33. Is your Guru a charismatic leader?

34. Does your Guru prevent you from trusting you’re own mind?

35. Does your Guru claim to have the panacea for market problems or all market conditions?

36. Does your Guru see he world through permanently tinted lenses?

37. Does your Guru make you think you can’t make it without his advice?

38. Does your Guru use unchallengeable sources of information?

39. Does your Guru inflate his experience or make bombastic grandiose claims about performance?

40. Does your Guru employ black and white thinking?

~~~

Score Key:

Add up  your “yes” answers and compare to the table below.

1 to 8        Probably Safe and reasonably selfless like Gandhi

9 to 17      Heard of one Werner Erhard & EST? Self-improvement with a dark twist.

18 to 26    Think of L. Ron & Scientology – Weird and NSFW.

27 to 35    Jonestown…plausible fringe idea gone horribly horribly wrong. Watch what you drink…

36 to 40    Put on your trainers & trackies and prepare for a Slim Pickens ride on Hale-Bopp

Category: Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

24 Responses to “Does Your Financial Guru or Doomster Resemble A Cult?”

  1. VennData says:

    So, all I’m getting with this huge management fee is a chance to wait in your plush foyer, sit at your cherry-wood conference table, and drink some Kool-Aid?

  2. InterestedObserver says:

    Replace “guru” with “political candidate”, and you pretty much have the definition of the current crop of politicians. It should be a sobering thought for either end of the spectrum.

  3. theexpertisin says:

    InterestedObserver…

    Bullseye.

  4. rd says:

    Too long a list:

    1. Does your guru immediately recommend that you buy his exclusive product to protect you from financial ruin (his)?
    2. Does your guru immediately recommend that you buy his exclusive newletter to let you in the what policy- and market-makers are thinking…..before they have thought it?

  5. tonyarko says:

    Ben Bernanke scores very high. As does most Keynesian economists. Jamie Dimon scored off the charts. And I won’t even get into the ECB gurus.

  6. RW says:

    Since a cult typically promotes contempt (e.g., ‘Sheeple’) or aggressiveness towards non-members while attempting to isolate members and/or actively prevent them from leaving those could be additional inventory options too.

    Some of the choices remind me of the last section (steps 4 – 6) of Harry Browne’s “impossible dream” (in Why the Best-Laid Investment Plans Usually Go Wrong) viz

    Efforts to understand and control the apparent randomness of financial events often follow a predictable pattern. Whether it’s trading systems, numerical projections, cycle theories, most rules of technical analyses, or what have you:

    1. Grain of Truth: A fantasy is usually founded on a principle that makes common sense as a generality – an observation about life or the investment markets that seems self evident when called to your attention.

    2. Over the Edge: This principle is then stretched beyond the limits of its usefulness. Instead of being a reminder it becomes a school of analyses.

    3. Scientific Posture: Mathematics and the name of science are invoked.

    4. Coronation: The fantasy becomes enthroned. The market pattern that now and then seems to hold true becomes a tenet of natural law – it simply happens too often to be coincidence.

    5. Sweet Superiority: Those who follow the system, advisor, etc. become the “elite”. No matter how many times the plan goes wrong, they must be better off than the poor boobs who are not “with it”.

    6. Dogma: In fact, there is never a need to acknowledge that something went wrong because:
    a. It really did work but was offset by factors that were stronger in this case.
    b. The system is perfect but people practice it imperfectly.
    c. This was the exception that proves the rule.
    d. It happened exactly as expected; you must have misunderstood the expectation.
    e. It was a clear cut, textbook example, of the principle working on an inverted basis.
    f. The result has been delayed, pressure is building, so the effect will be even more powerful when it comes.

    The study of the paranormal and the para-economic can be fun but in the real world there are principles of logic and truth that can’t be overruled; if a theory in economics can not, step by step, be explained in terms of the actions of human beings then the idea is simply superstition.

  7. rd Says: March 11th, 2012 at 2:11 pm

    Too long a list:

    1. Does your guru immediately recommend that you buy his exclusive product to protect you from financial ruin (his)?
    2. Does your guru immediately recommend that you buy his exclusive newsletter to let you in the what policy- and market-makers are thinking…..before they have thought it?
    ~~

    rd,

    you slingin’, well-deserved, Arrows in John Mauldin’s direction?

    if so, if you run out, I happen to have a spare Quiver, or Three..

  8. rd says:

    tonyarko:

    The University of Chicago monetarists score off the chart since they generally simply view the data as wrong if it does not match their theories. At least the Keynesians recognize that there are “animal spirits” in people.

  9. MikeW says:

    The first question on the list is particularly telling. I was watching the recent interview with Ray Dalio posted on The Economist’s website. He flatly states, “we’re wrong a third of the time”, or words to that effect. Someone like him is worth taking seriously.

  10. Giovanni says:

    @InterestedObserver +1

    Funny and chilling at the same time-

  11. b_thunder says:

    Dennis Gartman: 30 out of 35 (I’m not sure he uses disguised propagandists and a few other issues)
    Jim Cramer: 32 out of 37 (not sure about a few items as well)
    Peter Schiff: 40 out of 40 and would also score 50 out f 50, 60 out of 60 and 100 out of 100 if there were 50, 60 or 100 questions in the survey

  12. @InterestedObserver +1

    x2
    ~~~

    though, re..40. Does your Guru employ black and white thinking?

    every once in a while, I ~wish that more people would break out..

    Man·i·chae·an or Man·i·che·an (mn-kn) also Man·i·chee (mn-k)
    n.
    A believer in Manichaeism.
    adj.
    Of or relating to Manichaeism; dualistic.
    [From Middle English Maniche, from Late Latin Manichaeus, from Late Greek Manikhaios, from Manikhaios, Manes, the founder of the philosophy.]

    The American Heritage® Dictionary of the English Language, Fourth Edition copyright ©2000
    http://www.thefreedictionary.com/Manichean

    http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus-ns-aaf&v%3Aproject=clusty&query=Manicheaism

    LSS: some of this ‘Stuff’ has been with us “for Years..”..

  13. swag says:

    Robert Prechter, you da man!

  14. DrungoHazewood says:

    Obergruppenfuhrer Karl ‘Slim’ Denninger is pretty bad. I got in a dust up with him at the 09 bottom about the p/e on the S&P 500. He was blatantly misleading his ‘followers’. And his stock picks are deadly. RIMM just recently took him out on a stretcher, and his followers are so broke from shorting that I don’t think they act on his picks anymore.

  15. panskeptic says:

    Ron Paul followers are a cult.

    Ayn Rand followers are a cult.

    Milton Friedman followers are a cult.

    Austrian-school believers are a cult.

    Bernanke-bashers are a cult. (Where’s that hyper-inflation we keep hearing about? It’s three years overdue.)

    Gold bugs are a cult.

    People who believe anything published in a Murdoch-owned news source are a cult.

  16. wildebeest says:

    Mises.org

    absolute cult

  17. for the “Look”-readers among us..(panskeptic , wildebeest , though, not to name names..)

    care to have a peek at..

    http://www.youtube.com/watch?v=LgFreNSH6y0&feature=relmfu

    from ~8:15 to ~11:00..

    and, kindly, explain how Keen ‘gets it wrong’ about ‘Neo-Classical’ “Economics”..

    seemingly, ~everyone contra to that ‘School’ is a “cult member”, must be easy to disprove them, yes?

    Please try..

  18. Almitra says:

    I think Question 20 should read “Does your Guru refuse to admit when he is wrong?”

  19. Bob A says:

    sounds like Jim Cramer to me

  20. jbay says:

    Sounds like the legal system to me. Often contradictory, full of loop wholes and poor logic, group jargon and a clergy of individuals at the top that, are not only always right, but if you argue w. them they’ll send you to jail.

  21. rd says:

    jbay:

    At least the legal profession has an internally consistent policy. If you give the guys at the top enough money, they will reverse the position so that the other guy has his money taken away and he goes to jail.

  22. Clem Stone says:

    Hey I love Werner Erhard but yeah there is a tinge of cultishness in that movement but no more than in most organized religions and Zerohedge.

  23. wildebeest says:

    Mark Hoffer I didn’t really follow your comment but are you assuming that by branding mises.org a cult I would be opposed to Steve Keen? If so, nothing could be further from the truth, he is a breath of fresh air. If not, can you elaborate?

  24. A Darling says:

    I find it ironic that Werner Erhard or est are included in this scale- I have no doubt that if the current people running Goldman Sachs had ever done the est training, the culture that led Greg Smith to resign would never have come to be.