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‘And then 2022 happened’: I borrowed $500,000 from friends and family to invest in the stock market, foolishly promising a 10% return. Can I avoid legal action?
Market Watch ^ | Quentin Fottrell

Posted on 02/13/2023 2:23:36 PM PST by Fido969

click here to read article


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To: Renfrew

Thanks, I usually did well, but I did lose sometimes, as expected. But I did my homework. When I retired and couldn’t take on as much risk, I did well with REIT.


61 posted on 02/13/2023 3:14:49 PM PST by Rusty0604 (Desperately looking for new conspiracy theories as all the old ones have come true)
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To: Fido969
(1) Smells like bullshit.

(2) Doesn't even compare, even fractionally, to the damage Sam cryptoBank-Fraud unleashed:

Regular Americans who lost life savings to FTX!

There was a story about a protestor -- ONE -- who showed up at SBF's parent's home, held up a sign, took a picture, and before leaving, said they had lost their life savings. Journalist present didn't ask them a single question.

If this had been a GOP donor, the DNC would have hired protestors!

"In response to Genesis suspending withdrawals, Gemini halted redemptions from its Earn product. That left in limbo a program that, according to a person familiar with the matter, has $700 million of customer money tied up in it."

FTX fallout. Nearly a billion wiped from, not speculators, but people who used the Earn app as a referral product.


62 posted on 02/13/2023 3:15:22 PM PST by StAnDeliver (Tanned, rested, and ready.)
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To: Carriage Hill

See #58…


63 posted on 02/13/2023 3:15:59 PM PST by gov_bean_ counter (Eccl 10:2 - The heart of the wise inclines to the right, but the heart of the fool to the left.)
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To: Fido969

Sounds like to me that this guy and his friends and family are all Biden voters.


64 posted on 02/13/2023 3:16:09 PM PST by caver
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To: SamAdams76

“The object of filing your tax returns is to neither get money back or have to pay.”

By the time you file it is too late. It is what it is.


65 posted on 02/13/2023 3:16:16 PM PST by TexasGator
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To: Fido969

Bernie Madoff, is that you?


66 posted on 02/13/2023 3:16:51 PM PST by Sicon ("All animals are equal, but some animals are more equal than others." - G. Orwell)
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To: Fido969
Promising 10% returns

Red flag of potential trouble, if not fraud. Kinda like first sign of AIDS suggested in the literature: Sharp pain in your backside; doesn't an hour to recognize a sunset.

67 posted on 02/13/2023 3:17:15 PM PST by Ahithophel (Communication is an art form susceptible to sudden technical failure)
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To: Fido969

Yes, the options for farmers for example actually helped both sides. The farmers protect themselves from downside risk e.g. glut in the supply that forced prices down while the buyers protect themselves from the opposite e.g. undersupply sending the price high. It was a cost of doing business and minimizing price volatility risk for both parties.

In the stock market, it functions as the same thing but has become an animal of its own for many reasons including the fact that there are market makers running the trading desks. Tesla investors famously used options to force the trading desks to hedge the options they sold by buying shares and forcing a short squeeze. Same thing happened with Gamestop and Bed Bath Beyond and a few others. And the allure of a naked option is the “unlimited” upside. If you got yourself a 10 cent option at a $25 strike for a $20 stock that suddenly landed a huge contract that sent the stock to $45 - that 10 cent option is now worth $20 (and since each option is worth 100 shares, your $10 investment is now worth $2,000). If you risked a few $100 like that you *could* make a huge fortune, but again you have to be exceedingly lucky.

The unfortunate thing is that it actually happens quite often - you hear about something like that every week. There are the famous “wallstreetbets” type groups - I kind of admire their gumption to be honest - that look for stocks that have massive short interests and then try to force a squeeze against the big money shorts. But none of that is investing, none of that is hedging. It is gambling and gamesmanship and brinksmanship.


68 posted on 02/13/2023 3:17:53 PM PST by monkeyshine (live and let live is dead)
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To: Ikeon

You have raised an important point about choosing a financial planner. Choose one who charges a fee for his/her services.

Paying a financial planner a commission on what they sell you can be dangerous to your financial health. They have an incentive to put you in investment that generate large commissions for them which may not be suitable for you.


69 posted on 02/13/2023 3:18:08 PM PST by Maine Mariner
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To: Fido969
Since then, she takes pains to avoid me.

Never thought making a bad loan could have a silver lining.

70 posted on 02/13/2023 3:18:15 PM PST by Raycpa
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To: Fido969

When trading options & futures, the risk is infinite.

Meaning, you can lose much more than was invested. How much more?

Theoretically, infinite dollars.


71 posted on 02/13/2023 3:20:27 PM PST by jdsteel (PA voters elected a stroke victim and a dead guy. Not a joke.)
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To: P-Marlowe

“If he could put a minus sign before the 10% on the promissory note and convince the court that it was always there he might be ok.”

And add a zero.

-100%


72 posted on 02/13/2023 3:23:22 PM PST by steve86 (Numquam accusatus, numquam ad curiam ibit, numquam ad carcerem™)
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To: Fido969

I don’t know but he better be sure all his affairs are in order!😎


73 posted on 02/13/2023 3:23:57 PM PST by Bonemaker (invictus maneo)
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To: jdsteel

If you buy a put option or buy a call option there are not unlimited losses; you can only lose up to the amount of the premimum you paid.


74 posted on 02/13/2023 3:25:16 PM PST by Maine Mariner
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To: Fido969

A stock share’s price is today’s discounted price on its future distributions with adjustment for short-term greed/panic speculation.

Distributions are all the dividends and eventual liquidation.

Understanding the liabilities, cash flow, and components of forward income/expenses of a company are critical for analyzing the company’s real value.

Common shareholders are last in line on getting return.

Understanding the total share count and “fully diluted” numbers are critical in analyzing a stock’s value.

on an aggregate level I’m just in shock by the number of people a year ago who expected 10%+ returns as far as the eye could see when the present earnings yield (i.e. inverse of PE) on stocks was under 4%. I told them to get out and wait to get back into stocks when the actual earnings yield was up to their expectations on stock market returns or to at least level set their expectations better.

My present target is SP500 at 3300 with EPS falling to 190 this year and then 196, 205, 217, 233, 253, and 276 for the rest of the 2020’s. I see plenty of variations on the future earnings for the bull case, bear case, and this is the midpoint forecast. I also don’t count components with negative earnings on the EPS forecast as I eval those stocks separately overall and they create unnecessary noise for sound analysis if mixed together with the components having positive earnings. A deep recession or depression tends to cause lots of companies’ earnings to collapse.


75 posted on 02/13/2023 3:27:05 PM PST by Degaston
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To: Fido969

If one took a client’s money while promising a 10% return and did not deliver, then no, that person probably cannot avoid legal action.


76 posted on 02/13/2023 3:35:34 PM PST by SamAdams76 (4,895,899 Truth | 87,656,930 Twitter)
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To: Fido969

It sounds to me like he needs to be in jail


77 posted on 02/13/2023 3:40:54 PM PST by Nifster ( EI see puppy dogs in the clouds )
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To: Fido969

a very intelligent move! congrats.


78 posted on 02/13/2023 3:41:31 PM PST by SteveH
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To: Fido969

I knew someone who borrowed from others who were gullible enough to loan him the money.

He had no intention of paying them back. Until he got saved.

Then he paid every one of them back. It took years but he did it.

My mom was always fond of saying “Never do business with friends or family.”


79 posted on 02/13/2023 3:42:25 PM PST by metmom (...fixing our eyes on Jesus, the Author and Perfecter of our faith…)
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To: Bobalu

This is indeed a sad story... glad I’m not that guy...whew!


At least it is a write off for taxes....................


80 posted on 02/13/2023 3:43:07 PM PST by PeterPrinciple (Thinking Caps are no longer being issued but there must be a warehouse full of them somewhere.)
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