A big part of law school is learning to use precise language. Law professors delight in picking at every tiny ambiguity, inconsitency, or subtle weakness in your speech and writing. You come away from the experience with a new appreciation for all of the subtle ways words can be used to mislead, exaggerate, or stretch the truth.

I get fine examples every day in my mailbox in the form of investment marketing. Some of the uses of language are quite ingenious. Let me give you an example:

“Government Sanctioned Investment Opportunity Allows an Elite Few Investors to Earn Returns of over 100,000,000%!”

My investment research has uncovered a phenomenal investment opportunity. One that could literally earn you a return of over one hundred million percent, literally overnight! I know you’re skeptical. So was I, until I saw the proof. But the fact is that this investment is real, and has been verified by the Los Angeles Times, the San Francisco Chronicle, and even the United States Government. But you must act now, as this opportunity will disappear forever in only six days. Order my expensive special report today! You could be the next savvy investor to earn a nine-digit return. Order now!

Sounds outrageous, right? What investment could I be talking about? I’ll tell you: tickets for next week’s California Lottery. Now go back and read the previous paragraph again. Every statement in it is true. The Lottery is a government sanctioned “investment.” Winning the lottery provides you a return of over 100 million percent, as can be verified in every major newspaper in the state, along with government records. And I’m talking about next week’s lottery specifically, so there really are only a few days remaining to get in on it. Of course I never mention that there will be new drawings every week, or that your chances of actually winning are next to zero. But that doesn’t change the fact that my statements are true. Misleading, but true.

You don’t have to be a lawyer to see through language like this, of course. But investing marketeers use the same language tricks all the time. Chances are you see stuff like this in your mailbox every day. Frequently it’s no more subtle than my example.

Watch out for key phrases like the following:

  • You could make…
  • Savvy investors have made…
  • This stock is set to…
  • I am 100% confident that…
  • This stock could…
  • Potential returns of…

Statements like these are all speculative and noncommittal. They allow outrageous claims to be made, while avoiding responsibility when the rosy predictions don’t come true. Think about it. Technically, any stock could potentially gain 1000% in the next 6 months. No one knows for sure, including the marketeers making these predictions.

Marketeers often try to distract you from this by making ridiculously “precise” predictions. I’m sure you’ve seen claims like the following: “This stock could go up 1437.2%!” or “Savvy investors could turn $5,000 into $27456.22 in just 6 months!” Marketeers use these very specific numbers to try and convince you that they know exactly what is going to happen with a stock (a preposterous notion, but it’s amazing what greed can make people believe). But the marketeers combine these statements with non-committal language, so they are freed from any accountability for their predictions.

This is one of my favorite tricks, because it makes sorting my mail so much easier. Do what I do. Any time you see a forward looking statement that uses “precise” numbers like this, throw it right in the trash. And think like a lawyer whenever you look at marketing materials. You’d be amazed how many fallacies can crop up in one sentence. The marketeers know this all too well. So should you.