ANY SURPRISES LEFT SHOULD NOW COME FROM INVESTORS THEMSELVES (mutuals fraud)

NY POST ^ | 11/09/03 | TERRY KEENAN

[Liz]

The mutual fund scandal has shone a bright light on an industry where more than half of all American households park their money, and so far the scrutiny has produced a lot of nasty surprises.

Who would have thought there were so many inventive ways to cheat your loyal customers?

[Clara Lou]

OK-- Bonds are low-risk, but currently a bad investment. Now this business with mutual funds-- which I was just getting ready to put some money in at least until bonds got better. So what low-risk, slightly higher-return investment is there? I tell ya, the little guy can't get ahead.

[Liz]

There's a buncha FR posts on this. Why not do a search and become more familiar with the evidence so far.

[Afronaut]

Of topic but, Airline Exe.'s Are pulling down mega bucks while tax payers are subsidizing their companies.

Mutual funds provide a service and the fees have to be posted up front. If someone takes more than declared then it is stealing.

In my expirence 99.9 % of investors have no buisness trading a portfolio. They get killed everytime. TV investment shows are a comedy show to most professionals. Remember there is a small group who control 40% of the equity markets. The game is run by insitutions. Please don't think you can beat the house.

[Iscool]

Substitute CEO's for the fund managers and that is what going on in America companies

Don't forget that these are the folks that fund the Presidential and Congressional election Campaigns as well as the well paid (paying) lobbiests who pamper and persuade our great leaders...

[N3WBI3]

I have only been with putnam a year now, and they are up 15% on my 401K.. Things like this make m e wonrder if it is a fluke

[SierraWasp]

"I tell ya, the little guy can't get ahead."

There are temporary periods in economic cycles where that is absolutely true! Temporarily, fixed interest vehicles are the "low-risk" parking lots, or "sidelines!"

If you are afraid of risks, then you are afraid of rewards, or waiting for them. Carefully calculated risks can minimize risk, without eliminating it, but can create a higher degree of safety. Ask a pro to help you with techniques like diversification, to spread risk.

There are rotten apples in each barrel and they stink it up pretty bad. Glean the good one's that were good before and will be even better after the bad one's are gone.

It's a catharsis, of sorts and is cleaning out the Clinton era ethics/morality break down that is NOT systemic! Believe it or not.

[Wolfie]

First things first, we have to get Martha Stewart behind bars.

[lelio]

Yes, it's funny how the great unwashed will forget that all this crooked cooking of the books was going on during the Clinton boom years.

That refrain is getting a little old after 3 years, especially considering that both parties blocked the SEC from any real enforcement in the Clinton years.

Bush has a chance to pro-actively solve this problem and start looking around for more infractions instead of relying on Elliot Spitzer to do his work for him.

[Grampa Dave]

Probably none of the retirees in Florida voted for GW in 2000.

Most voted by absentee ballot for the Goron in the state they were from. Then if they didn't hang a chad in Florida. They voted for Goron again.

Worrying about those voters is like worrying about the SOB's not voting for GW, the Sons of Buchanan. They never have and never will.

Having said that. The CEO's of the good mutual funds are using this as an opportunity to push for more reforms and transparency for the "little" investors.

Those who participated in these scam will be:

1. Fired and banned from even coming into the offices of the funds.
2. They will be tried by local DA's since their crimes were done in a state.
3. Fund companies like Putnam and other fund companies where these scams were rampant will be in big trouble. They will lose their locked in business with states, unions and other large groups. Then, they will be merged into other funds.
4. Finally Congress will get off its A$$ and pass some re reform acts for the mutual fund industry.
5. The next group to get bashed will be the bond fund managers who can spin and talk for hours and never say anything that touches on realities.
6. The good fund companies and their good fund managers will be in even more demand as the Bush economy continues to bury the doubters.

[bvw]

TERRY KEENAN: "Americans pay mutual fund companies tens of billions a year in fees in order to have someone else to manage their money. Unfortunately, individual investors may have to take that power back in their own hands."

They aren't allowed to, Keenan. The trillions in "Retirement" plans must, BY LAW, be invested in approved funds. Almost NO plans allow individual investment choices. And, personally Keenan, I'd like to INVEST my nest egg in local RE and local businesses, like restaurants. But BIG MAMMMY NANNY STATE will not ALLOW that.

[Incorrigible]

[templar]

Yes, it's funny how the great unwashed will forget that all this crooked cooking of the books was going on during the Clinton boom years. I never hear that mentioned specifically on any of the business shows, so those with a short attention span will just remember this as happening during Bush's term.

And, of course, all those with an attention span limited to the Clinton administration will see nothing happening before or after as part of the problem as well.

Crime by fraud and deception has been around for quite a while (some say almost since the beginning of mankind) and criminals are always going to look for weaknesses to exploit. We can't anticipate every situation that will ever arise and make a pre-emptive law to prevent it. There is an old saying about not being able to cheat an honest man. Greed (an attempt to get something with little or no real effort) is a form of dishonesty, IMO. The person looking for honest profits and realistically approaching his investments (and their risks) rarely gets cheated. The lure of huge profits on small iinvestments is just too much for most investors though. Laws tend to be enacted after the fact to crimes.

[templar]

I tell ya, the little guy can't get ahead.

It depends on how you look at investment. Would you rather go out and buy a business that makes enough profit to earn back your purchase price in 30 or 40 years or would you rather go out and buy a business that will earn back your purchase price in 1 or 5 or 10 years? The PE of a stock is all that I've found to be of any value in evaluating a it, and any PE above 12 is just plain bad investing as opposed to just buying a business or starting a business (including real estate). I've found that 10,000 dollars invested in new equipment for my business pays for itself and starts making my bank account bigger in about 3 years. The stocks I buy seem to make nothing or make my bank account smaller. I'm pretty much through with stocks as an investment.

During the '90's I bought precious metals and I bought stocks and I bought equipment for my work. Guess which ones I still have and which ones are worth as much or more than when I bought them and which one puts money in the bank today?

[SierraWasp]

"I'd like to INVEST my nest egg in local RE and local businesses, like restaurants. But BIG MAMMMY NANNY STATE will not ALLOW that."

Are you ever RIGHT ON THE MONEY!!!

I ran for local government office a decade ago, trying to make "Main Street" safe for investors like you! The Liberal EnvironMentalistas and NIMBY's filed a blinding blizzard of litigation!

Not being a "Politician," I didn't get re-elected and proceeded to help people invest in "Wall Street," instead. Now all the liberals are ganging up on that "Investment Backed Expectation," trying to make it look as evil as possible!

What's NEXT?

[Grampa Dave]

Actually, my wife's Fido Ira and my Fido Ira allow us to invest in any stock that is traded, bank cds, treasure notes and bonds/promisary notes from a lot of companies.

I recently rolled over my Fido 401k because of the restrictions that you noted to my Fido IRA. I'm retired, so I can do that.

My wife's old 401k was a terrible pos. There were so many complaints that they are allowing self directed 401ks. Unfortunately Fido was not ready for these new self directed 401ks.

So we went to Vanguard. They are like dealing with the worse old maid school teacher that you or I ever had. However, if you are willing to jump through the hoops, you can invest in any Vanguard Mutual Fund that is being sold. However unlike Fido and most other 401ks, she can't use the internet to sell or buy funds. Everytime we have to go through a gauntlet of Nannies saying no. Things got a little better after I sent an email saying that if they did locate her account and allow some trading, I would notify SEC.

Finally since dealing with them, she is fully invested in what we see as their better mutual funds. Of the eighteen, I might have 6-8 of them in my IRA if I didn't have to pay a fee for each fund purchased or sold. Fido and Vanguard erect little expensive fences to prevent their customers from buying from the other big guy.

Needless to say the moment my wife retires, that Van Guard 401k will be rolled over to her Fido Ira. That should only take about 3 months knowing Fidelity.

[anniegetyourgun]

ROFL!

[Liz]

Nice list.....now may be a good time to get into the M&A business.

[TopQuark]

Just an example of how the "correspondents," even those specializing in business, distort the facts and shape our culture --- all in name of being "egalitarian," or as the British now call it, "democratic."

Well, in the case of Putnam and others, huge compensation packages from the top on down led to a culture of greed and arrogance.

There is absolutely no evidence for that whatsoever, and has never been. What is true is that "greed" exists first and gets attracted to places where it can be satisfied.

It is nothing short of amazing that the word "greed" is going in the way of "gay" --- being hijacked by the leftists. The pursuit of profits has never been looked down upon in our culture --- in fact, it was admired: "industrious" used to be a compliment.

What has always been looked down upon, and more so in the past than now, is certain methods by which one pursued profits. Observe, however, that there is no emphasis on the methods in the quoted sentence: the culture of greed is the culprit itself. Pathetic.

(Sound familiar?) Despite the fund industry's image as a place to invest for the long term, Putnam managers were encouraged to take risky bets in order to meet quarterly performance goals that translated into golden bonuses.

So she admits herself: it is not the size of the bonuses --- characterized earlier as "huge" --- but the structure of the compensation that is allegedly a problem: it is the measures of performance to which bonuses were tied that must be called in question. That is not what she does, however.

Why do we even talk about greed here? Why is mere dishonesty not a sufficient explanation? These people were crooks; there is no excuse for their actions. The question of where crooks come from is that of sociology --- in the case of all crocks but those in business: here the leftists have to attack the very essence of business. And they do so, as demonstrated by Keenan, no matter how unqualified they are to do so.

The problem is, they get away with this even when the self-described conservatives read this trash.

[TopQuark]

I suspect that many of those mutual fund investors are workers who are spoiled by the trade unions and are too lazy to compete. No need for saracsm here: the references fund managers and traders are pure crooks; they have not right to do what they did to any investor --- even felons who chose to invest.

Another example of envy and class warfare.

The example is given once again by the leftist elites that exploit the anger by misdirecting it from the perpetrators to the very essence of American society. And they are increasingly successful in doing so.

[TopQuark]

How do you evaluate "the price of talent"?

There is only one mechanism for price formation: the market --- in this case, the labor market --- determines the price for Michael Jordan, Paverotti, presidents and provosts of universities, Grasso, and top managers management of organizations.