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Three Investing Lessons from Bernie Madoff
Last week I caused a bit of a controversy on Fox News when I suggested that Bernie Madoff might do more good than harm in the long run – there are some good investing lessons for everyone to note.
Don’t get me wrong. Madoff himself is a despicable person. Over a twenty-year period, he created the world’s biggest Ponzi scheme worth an estimated $65 billion. Hundreds of individuals, retirees, and charities were hurt or destroyed by Madoff’s deception.
He deserved to get the maximum penalty (150 years).
Nevertheless, I look at all the positive side effects of the Madoff scandal. Here are the…
8Jul2009 | Investment U | 2 comments | ContinuedWho is the “Greater Fool” Now?
Many Americans, and indeed many people the world over, have lived in a Ponzi bubble economy for more than a decade. They have applied the Greater Fool Theory in the false belief that they would always be able to sell their house or their stocks or bonds or other highly leveraged assets to “bigger fools” than they were for buying them in the first place. With the collapse of the housing bubble and the stock market it begs the question “Who is the ‘greater fool’ now?”
A Ponzi bubble? Yes, after Charles Ponzi, a Bostonian with an eye for get-rich quick…
15Apr2009 | Lorimer Wilson | 0 comments | ContinuedFinancial Scams Go Global, Here’s How to Avoid Them
Bernie Madoff’s guilty plea to a decades-long $50 billion-plus Ponzi scheme pretty much guarantees the 70-year-old will have his likeness immortalized on the Mt. Rushmore of scammers.
The former NASDAQ chairman’s December arrest – with collapsing U.S. and overseas stock markets as a backdrop – kicked up a firestorm that has forced investors to take a much-closer look at who was managing their investments. Scores of investors have lost their life savings, retirees found their nest eggs gone and countless charities discovered that they were essentially out of business; the cash that they once handed out to worthy causes had…
19Mar2009 | Money Morning | 0 comments | ContinuedFinancial Fraud: 3 Easy Steps to Avoid “Bad†Investments
Three weeks ago, in Investment U Issue #898, I promised you a 30% return on my “Keynesian investment strategy” of buying a deeply discounted fund, the John Hancock Preferred Income Fund (HPI).
Guess what? It’s already achieved the goal of 30% return (including a nice dividend).
Today, I’ll show you how to keep your hard-earned profits from being stolen by some unscrupulous broker or money manager through financial fraud.
Sadly, quite a few wealthy individuals lost their entire fortune and are now penniless because they invested their money with Wall Street veteran Bernie Madoff. He is alleged to have lost $50 billion.
By taking some…
8Jan2009 | Investment U | 0 comments | ContinuedWhere’s the Bailout Now?
The U.S. has been dishing out the bailout funds at a truly stunning pace. It wasn’t too long ago when Fannie Mae and Freddie Mac received those first capital infusions. Since then, so much money has been dolled out that it’s difficult to follow who got what money, and who the next recipient of government funds is going to be.
I want to take a look back into some of the specifics of the bailout, and where there at today.
Being that I mentioned Fannie and Freddie already, let’s start there. The GSE bailout package gives the U.S. government the option to…
11Nov2008 | Oxbury Research | Comments Off | ContinuedIndium IPO: Buy or pass on this rare-metal IPO?
There is a difference between investing and hoarding. Investors and traders buy and sell equities and assets to make money. Hoarders pile up assets in the hope of values rising. Converting them back into money is often not a priority.
The commodities supercycle has taken hoarding to a professional level. Commodities funds have been buying up gold, metals, oil, sidelining them from the market, increasing demand while reducing available supplies.
Shell games like this have become increasingly popular as panicked investors are fleeing real estate and stock markets toward the presumed safety of gold, oil and metals. The more pile in, the…
28Mar2008 | J. Christoph Amberger | Comments Off | Continued
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