As from April 2013 my Journey in Investing is to create Retirement Income for Life till 80 years old for two over market cycles of Bull and Bear.

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This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

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Sunday, 29 September 2013

Scrutinise financial investment seminars too (2)



Read? Scrutinise financial investment seminars too


invest, thesundaytimes, Sep 29
 
Lessons from fallen financial idols


From Bernie Madoff, mastermind of the biggest Ponzi scheme in history, which cost investors at least US$18 billions in losses when the law finally caught up with him.


Some advice he offered to investors on how to avoid getting scammed boils down to common senses.

Madoff said: "Wall street is not that complicated. If you ask an average hedge fund or investment firm how they make money, they won't tell you. If you don't understand something, then don't invest in it."


.....

And he noted that if an investment sounds too good to be true, it is. He had offered his clients a consistent 11 % to 12% year after year which made no sense, yet nobody questioned him about it and he was able to continue with his scam for along time.



CW8888:

Why did Madoff said: "consistent 11 % to 12% year after year which made no sense."?

To understand why?

We just need to look at the benchmark of the world's best investors and their respective CAGR and have some common sense and be realistic on the not-world-class expected average return.





Same for any "Gurus" who claimed to have discovered the Wonderful Magic to make you rich.

Have some common sense; but common sense is not exactly common and that explains why many gullible will always fall into it.



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