Guy who recently completed a book on gullibility got stung by Bernard Madoff. Interesting and frank analysis as to why.......
http://www.skeptic.com/eskeptic/08-12-23.html
http://www.skeptic.com/eskeptic/08-12-23.html
Interesting Discussion on Ponzi Schemes (Madoff) By A Guy Who Got Burnt
- Thread starter Token Funder
- Start date
You attract into your life what your mind is focused on. It dosen't surprise me that someone who is focused on not getting scammed will get scammed!
Real intelligence is not in devoting energy trying to avoid scams but to learn something about your own psychology after you have been drawn to it. What YOU have you done to cause these things in your life?
If you lose that lesson you have lost something far beyond any monetary losses bought about by the scam, you have lost the ability to be responsible!!!
Without total responsiblity for everything that you attract into your life there is no hope in moving forward.
Real intelligence is not in devoting energy trying to avoid scams but to learn something about your own psychology after you have been drawn to it. What YOU have you done to cause these things in your life?
If you lose that lesson you have lost something far beyond any monetary losses bought about by the scam, you have lost the ability to be responsible!!!
Without total responsiblity for everything that you attract into your life there is no hope in moving forward.
Are you a fan of The Secret?
Not sure what you're saying Xenia...the entire article is revolves around this chap taking a very objective view of how he got caught.
BTW, the Churchill/Flemiing/penicillin yarn on your website is an urban myth.
http://www.snopes.com/glurge/fleming.asp
Token-Funder,the best is yet to come 09 will test everyone,thanks for the link,just goes to show you be up in the top end of investment worlds and a simple "Black Swan" comes along and changes everything..all the best for 09........willair..
Ponzi scheme is a fraud where invested money is pocketed by the schemer and investors who wish to redeem their money are actually paid out of proceeds from new investors. As long as new investments are expanding at a healthy rate, the schemer is able to keep the fraud going. Once investments begin to contract,
by Stephen Greenspan
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No! I couldn't even sit through that glorified, sensationalised way of explaining a simple concept in human evolution. In order for the normal lay person to understand, the true concepts were watered down to the point that they had no real meaning and gave the illusion that some majic or mystical force is involved. (funny! That's what religions do
)The real secret is that there is no secret. The answers were always there!
Thanks for the tip about the myth, just liked the story
I would have thought that the more you are aware and conscious of a scam, the less likely you are to fall for one.
I think it is more likely to be the reverse; the more paranoid you are about being scammed, the more over-cautious you become and less likely to take action.
The bottom line is Madoff never invested the money and lied about the profits.
As far as paying investors with new investors money this is speculation and I believe many would do this legally anyhow, in a large corporation who is to say exactly where each dollar comes from.
What a joke "the secret" turned out to be, unbelievable even to the extent of selling magic items on thier website!, it is the exact same result as a ponzi scheme, it is all a completely fabricated deception to create money out of thin air, a glorified pyramid scheme, end result is that they inspire people with greed, then destroy them.
As far as paying investors with new investors money this is speculation and I believe many would do this legally anyhow, in a large corporation who is to say exactly where each dollar comes from.
What a joke "the secret" turned out to be, unbelievable even to the extent of selling magic items on thier website!, it is the exact same result as a ponzi scheme, it is all a completely fabricated deception to create money out of thin air, a glorified pyramid scheme, end result is that they inspire people with greed, then destroy them.
Ponzi Schemes are a perfect example of Japanese businesses and Japanese economy. Companies post all these great returns of what they say they are worth and what they have made but never mention what they paid out or how much they owe. Good way to get new investors. When someone wants to take their money out all the excuses in the world are made and people rarely get anything. AGM's are a laugh to watch. Groups of hired thugs stand around the meetings and quickly shout down anyone who asks questions etc.
This is where the financial education kicks in.
People who choose not to make the effort to become more educated, and are happy to simply hand over their cash to another "professional" to manage are adding risk to their investing.
This, unfortunately, is most people today. They want the easy path with minimal involvement, but maximum return.
Things like property, property developing, puts, calls, options, warrants etc require more work and a more sophisticated level of knowledge to succeed at than a super fund or a managed fund.
BV,
You definitely hit the nail on the head about people wanting the easy path with minimal involvement and max returns. Educating ones self about investing should be a priority but there appear to be too many that just read the headlines and then think that's a good idea lets do it.
Would be interesting to know how long it took members here to buy their first IP after deciding they wanted to invest in real estate. To memory it took me about 5 years from getting the idea to actually going out and doing it.
You definitely hit the nail on the head about people wanting the easy path with minimal involvement and max returns. Educating ones self about investing should be a priority but there appear to be too many that just read the headlines and then think that's a good idea lets do it.
Would be interesting to know how long it took members here to buy their first IP after deciding they wanted to invest in real estate. To memory it took me about 5 years from getting the idea to actually going out and doing it.
This is a very difficult question to answer how long it took to buy an ip.
Things changed drastically when no doc loans appeared, thanks mainly to Aussie John but of course this was a double edge sword and also created problems for many.
I got straight in the market but till that time due to lack of knowledge/money and showing enough income I got nowhere, it just seemed an impoossible task securing a loan.
Being self employed was a big hurdle, all the while I knew that if I got a paid job for six months that would have done the trick but I was not prepared to do that.
Very silly in hindsight.
It is amazing just how educated your average person has become with property investment but it just added fuel to the fire and now we hit "the big bust".
Law of averages will determine where we all sit in a year or two as business slows and unemployment rises.
It becomes a simple question of how long can you hold when the problems mount up.
Like the analogy with the two swimmers and the shark, you don`t have to outswim the shark........................you just have to outswim the other guy.
But by far the most mind blowing concept is an investors mindset to change from abundance to an empty glass almost overnight!.
I have no doubt that there are a vast majority of investors who would sell out certain sectors right now (including myself or at least I entertain the thought!) just for some spare cash at half what they would have a year ago!, just for a little security when in fact there is no definite sign that real estate will drop at all, anywhere, remember Y2K?.
Markets can and do turn on a dime in a matter of months.
Real estate may well be king again in a year.
Things changed drastically when no doc loans appeared, thanks mainly to Aussie John but of course this was a double edge sword and also created problems for many.
I got straight in the market but till that time due to lack of knowledge/money and showing enough income I got nowhere, it just seemed an impoossible task securing a loan.
Being self employed was a big hurdle, all the while I knew that if I got a paid job for six months that would have done the trick but I was not prepared to do that.
Very silly in hindsight.
It is amazing just how educated your average person has become with property investment but it just added fuel to the fire and now we hit "the big bust".
Law of averages will determine where we all sit in a year or two as business slows and unemployment rises.
It becomes a simple question of how long can you hold when the problems mount up.
Like the analogy with the two swimmers and the shark, you don`t have to outswim the shark........................you just have to outswim the other guy.
But by far the most mind blowing concept is an investors mindset to change from abundance to an empty glass almost overnight!.
I have no doubt that there are a vast majority of investors who would sell out certain sectors right now (including myself or at least I entertain the thought!) just for some spare cash at half what they would have a year ago!, just for a little security when in fact there is no definite sign that real estate will drop at all, anywhere, remember Y2K?.
Markets can and do turn on a dime in a matter of months.
Real estate may well be king again in a year.
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Yes it is quite simple they park their brain at the reception desk before they enter the consultant's office to be fleeced.
In early 2007 we had some friends who are teachers tell us they were going to see this great investment advisor. I was concerned and since I knew that they had a great investment property that is paid off I warned them that his advice would be to sell the investment property and let him "invest" it in a variety of managed funds to...... spread their risk
When you look at how many people were "advised" to sell their investment properties, paid capital gains tax, then via these advisors put the balance into super in shares (most of that in managed funds) in late 2006 to June 2007 its very sad. It also made no sense, crystalizing a capital gain that you control to give it to someone else to control
Investment advisors IMHO are somewhere between a slug and a crustacean in the evolutionary scale of life.
So now we hear these same "advisors" saying that its time in the market not timing that is important. So a large percentage of these poor investor bunnies are going to discover that this truism has a big qualification.
Everything in life has a cycle and for a large percentage, their lost investment opportunity costs have put paid to their investment, especially when you have a parasite feasting on the carcus of what is left of their investment corpus.
My sons roared with laughter the other night when their mum was out of the room and this MLC clown was on the TV walking down a roughed surface talking about another investment truism and I made a few suggestions
By October 2009 we are going to see the ASX at 2200 and another truism is going to reappear for an entire generation "The share market is no place for orphans or widows"
you mean he wrote the book on gullibility? really? are you serious? no way... honest?
