Options Trading: The financial news networks were busy yesterday covering the sentencing of convicted fraudster Bernard Madoff. Madoff was given the harshest penalty possible; 150 years in prison for defrauding thousands of his investors.
Luckily I was not a Madoff investor. But from what I have learned about his investors, I would not have been one of them. There was a guest on CNBC that said out loud what I was thinking.
People who invested with Bernard Madoff were greedy and happy to accept high returns without probing too much in the way these were achieved, Hugh Hendry, chief investment officer at hedge fund Eclectica, told CNBC Tuesday.
“I’m sympathetic for people losing money but I think this pejorative term of being greedy still applies,” Hendry told CNBC.com. “There was an implicit greed in not questioning and just accepting unnatural returns.”
“They didn’t show the requisite amount of fear that would have generated the curiosity to investigate,” he said, adding that for every one Madoff investor, there were ten who stayed on the sidelines.
For over 20 years Madoff got these people returns of 10-12% a year with NO down years. No one was complaining then. When you listen to the “victims” they talk about their life savings disappearing. They wonder how they will pay their mortgages and living expenses. A couple have already committed suicide.
I don’t want to sound mean, but everyone needs to have some common sense. Why would you put 100% of your money in any one investment/stock/advisor? That’s insane. You work hard for your money and you turn it over to someone you don’t even know? I can understand someone investing 10-20% with Madoff, but 100%? That’s just asking for trouble.
But let’s look at it from another view. Madoff lost 100% of the money invested with him. Actually, not 100% because the government is busy recovering as much as they can. But to keep the math simple let’s call it 100%. If instead, we had put our money in a mutual fund, we would have lost anywhere from 30-60% from 2007 to the end of 2008. So Madoff lost about double what the “professionals” on Wall Street lost. BUT, over the years Madoff paid off a lot more in returns than any mutual fund. If that money way withdrawn, then investors would still be ahead, even after losing 100% of their original principal.
In a coming post I want to outline some of the lesson we can learn from Bernie Madoff. One of them is that you should actually know where you money is and what it is being invested in.
My problem is with the sentence. This man got more years in jail than murders, rapists, and child molesters. Is that fair? I don’t think so. No one forced any of his “victims” to give him money. Many of them BEGGED him to take it. There were no guns or threats used.
If his victims want so much justice let them pay for his prison bill. Why stick it to the taxpayer? Let the government use the money they recover from Bernie to pay for the cost of his incarceration. Use my tax money to keep the psychopath killers behind bars. Madoff is no threat to me.
One of the problems in today’s society is that no one want to take responsibility for themselves.
- You lost my money so it’s your fault. Even though I signed paperwork saying that you could lose it.
- You gave me a loan for a house I knew I couldn’t afford. Now I want a modification so I can stay in the house on which I am no longer making payments.
- I had 4 children out of wedlock with 4 different men who all left me and I can’t get a job because I am too fat to move so the government should pay for my house, my bills, my food, and give me money in the form of unemployment benefits and disability. ( I am not making this up. This woman once rented a house from me. Section 8 pay for the rent and utilities. She got food stamps, and unemployment and disability. She was so fat that she could not go up the stairwell to get to the second floor.)
- I could go on and on.
Why I created my Options Trading website
That’s why I LOVE my members. They are people who want to invest their own money. They want to work hard and succeed without handouts or excuses. They are one of the reasons I created my site – to help those that want to succeed.
Bernie, your lack of ethics is appalling. You should be punished severly. But 150 years is a bit much.
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