Ponzi Schmonzi, "Caveat Emptor"

I’m sick of the Bernard Madoff victims, those who lost everything. They want to know how they can recoup some of their losses. They think that taxpayers should bail them out, probably. Why not, it’s good enough for B. of A. They want to know how Bernie got away with his “Ponzi” scheme. He got away with it because of (his) investors’ blind greed. That’s right. If you invest in a fund that is returning unrealistic profits, guess what, something there is unrealistic.

THE GOLDEN RULE: If it’s too good to be true, it isn’t true.

I have some money in a mutual fund that returned 200% for a few years. Guess what, I lost my butt on it in this recession. But I don’t have all of my money in it. I have gambling money in it. INVESTING IS GAMBLING! It just so happens that investing has been a good bet for 70 years. Stock market investing has done better than real estate investing during that time span (on an average annual return basis; look it up), with much less “front” money needed to get involved. One can also easily beat the market. I do it every year as a non-financial genius.

Your investment strategy is your responsibility. Your financial future is not the responsibility of B. Madoff, A. G. Edwards, Fidelity, Edward Jones, Val Kilmer, or Batman.

STAY DIVERSIFIED! Don’t invest all of your money in a higher-than-normal return fund. Do due diligence and research. Hotter than normal funds will get colder than normal. They must be looked at as “growth”, not “income”. I have bought growth stocks that went to zero. So my “growth” was negative, but I knew that the possibility existed going into the deal. I put a small amount of gambling money into the wrong pot. I have lost money on “Growth” mutual funds. But I still had 48 other investments to fall back on.

If you were 100% invested with B. M. (hmm, what else does that stand for?) you deserve what you got, period. Some of that money should have been gambled on Pepsi Cola. Or even the lottery or slot machines. Shame on Bernie, but shame on you. People who are violated may be in the wrong place. Nicole continued to live near O. J.

As a sidebar let me recommend “American Funds” (they have lost their butt too in the downturn). They use a team approach. It’s highly unlikely that 8 people in control of a fund will all make the same mistake. That would be obviously questionable, and it would be the investor’s responsibility to recognize deception. American has been around since the 1930’s and probably will be around when Bernie gets out of jail. He should consider investing in Am. Fds. in year 2160, when he gets free. A $10,000 investment in one of their original funds in 1934 (with dividends reinvested, very important) is worth 40+ mil. today. A $10,000 home in 1934 is worth about 50 mil today?

Sidebar #2: The stock market always over reacts. If coinciding to the drop in the stock market by percentages (as if Dow 14000 was ever realistic), unemployment levels should be far higher than in the Great Depression. This country should be 58% of what it was 2 years ago. Pfftt! There is no correlation between the market and the reality of economics. BUY WELL & HOLD. Look for companies that have actually raised dividends in the face of the financial disaster. You thought that there weren’t any? You are not doing your job, then.