Tuesday, June 5, 2012

Warnings as Advertising

A recent request to advertise on this blog came from a company I won’t name, but their web site’s home page contains a prominent risk warning about their leveraged spread products. Part of the warning says “losses can quickly exceed your initial deposit” and “not suitable for all customers.” This should scare people away, but I wonder if it draws some people in.

Repeated warnings of adult content in television shows seem to be more a form of bragging than warning. I’m sure there are parents who use these warnings to find tame content for their children, but more often these warnings draw viewers in.

On a certain level the risk warning on the web site was saying that the investment products are only for sophisticated investors who know what they are doing. That can be like telling a teenager not to try smoking if he’s chicken. I’m willing to be that most of this company’s clients are men.

3 comments:

  1. How else do you explain folks still smoking with cancerous pictures on the package?

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  2. "Do it or you're scared!" in legalese, eh? Interesting idea, Michael.

    I tried to figure out what website it was by searching for the warning, but apparently there are many firms offering ways to have losses quickly exceed your initial deposit.

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  3. @Big Cajun Man: Those pictures are enough to put me off my lunch.

    @Gene: It's kind of depressing that the description and quotes I gave aren't enough to narrow down the search. I guess there are lots of businesses that seek overconfident investors.

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