Stock-market program promoters can’t have a sucker without ‘u’

Dear Mr. Berko: I know that you don’t like most stock-market
services that claim subscribers earned much better returns than the Dow Jones.
In fact, I invested in one of those services, which cost me over $4,000, and
lost my shirt. I just wish I had read your column on that one prior to wasting
several months’ time, plus $4,300. The name of this stock market service is
called iDayo, and the cost is only $3,000 a year. But their record is the most
impressive I’ve ever seen. In 1999, iDayo returned 100 percent; in 2000, iDayo
returned 84 percent; in 2001, 2002, 2003, 2004, 2005, 2006 and 2007, iDayo returned
16 percent, 18 percent, 55 percent, 13 percent, 17 percent, 53 percent and 32
percent, respectively. That’s an average annual return of over 43 percent and
only requires 15 minutes of time a week, in which they give me three to five
stocks. Show me another stock-market service that was up 84 percent in 2000,
when the Standard & Poor’s was down 11 percent; or in 2001, iDayo was up 16
percent when the S&P was off 13 percent; and in 2002, when the S&P was
off 23 percent, iDayo was plus 17 percent. These people are magicians, and you
can verify all these claims on the Internet by going to www.idayo.com. Please
tell me if you can find a hole in their work because if you can’t find fault
with iDayo, I’m going to subscribe to their program and hopefully begin to make
some decent money. I know seven stockbrokers, and not one of them have made
returns as good as iDayo. And I’ve had four stockbrokers over the past 20
years, and not one has come close to iDayo’s results.
— L.T., Syracuse,
N.Y.

Dear L.T.: I thought that “iDayo” was a song by Harry
Belafonte in which he sang about a bunch of bananas. Now I discovered that it’s
a stock market program that boasts of extraordinarily impressive results. And
yes, your math is good but short – iDayo claims a 50 percent average annual
return since 1998 on its Web site. Pure tommyrot and trash!

I called its offices in Loxahatchee, Fla., and right off the
bat had trouble understanding the woman on the phone who spoke as if she had a
golf ball glued to her tongue. Strike one.

She did tell me that Tom Barrett and John Layborn, the
developers and promoters of iDayo, were recently developers and promoters in
the construction business. In fact, the current iDayo business phone number and
business address is the same phone number and business address that Messrs.
Barrett and Layborn used for their construction business. Strike two.

I called Barrett, and he demanded to know how I got his
office phone number. It’s on the Web site, stupid! Now how can two developers
and promoters, who recently exited the construction business, construct a
super-sophisticated stock market program with an incredulous 50 percent average
annual return for 10 years? Strike three … four and five. Heck, strike out!

I must tell you that the track record provided by Barrett
and Layborn is mighty impressive, and I’ve never seen a 10-year track record
with performance that is even half as good. Their 10-year, 50 percent average
annual return is expialidocious, but as my dad used to say, “It’s easier to
believe a big lie than a small one.” Heck, even if that 10-year record was cut
in half (25 percent), I still wouldn’t know of a single mutual fund,
professional trader, major brokerage house analyst, hedge fund manager, private
bank, floor broker or individual investor who averaged even 25 percent a year
over the last 10 years.

But just in case my knowledge was faulty, I rang three
mutual- and hedge-fund managers, and two major analysts, plus a very successful
floor trader. And each of these professionals believes that a 10-year average
annual return of 50 percent is possible, but not one of them believes that it’s
probable. So I said: “What about a 10-year average annual return of 25
percent?” They all gave the similar answers: “Scam, man,” “whatchasmokin?’ and
“I can’t believe people fall for that bull …” One fund manager said, “I’d pay
$100 million for a program that can produce a 10-year 50 percent average annual
return plus another $100 million if it only requires 15 minutes of work a
week.”

Now, I’m not saying that these lads are cooking the books or
fudging the chocolate. And frankly, it’s possible (so is winning the lottery
three weeks in a row) that these good lads are really bringing in a 50 percent
average annualized return for the 10 years. Good golly, Miss Molly, them’s
certainly bodacious numbers!

For your information, I’d like to ask you four simple
questions.

1. If those boys can make 50 percent a year, why are they
wasting time selling their secrets at $3,000 a pop to suckers like you?

2. How come those results are not audited according to
generally accepted accounting practices?

3. What is the truthful business background of those two
birds who claim they averaged 50 percent a year for a decade?

4. How come not a single one of the 15,000 or so mutual-fund
managers, portfolio managers, pension-fund managers, hedge fund managers,
securities analysts or professional traders here or overseas uses the iDayo
system?

•
Malcolm Berko responds to letters he receives; send
questions to Berko, c/o Central Penn Business Journal, P.O. Box 1416, Boca
Raton, FL 33429. He answers questions by mail or in his column for free. If
readers want in-depth analyses, they may be asked to become clients.
©Copley News Service