They Told Me That Madoff Never Lost Money (Ben Stein)

New York Times ^ | December 28, 2008 | BEN STEIN

[nickcarraway]

ABOUT two years ago, a little delegation from a major investment bank arrived at my home in Beverly Hills. These nice young people were from the bank’s “wealth management division.” I told them straight away that I didn’t have anywhere near enough wealth to make their trip worth their time, but they smilingly insisted that we could help each other.

They told me that if I invested a certain sum with them, they would make sure that a large chunk of it was managed by a money manager of stupendous acumen. This genius, so they said, never lost money. He did better in up markets than in down markets, but even in down markets he did well. They said he used a strategy of buying stocks and hedging with options.

I protested that a perfect hedge would not allow making any money, because money made on the one side would be lost on the other. They assured me that this genius had found a way to spot market inefficiencies and, indeed, to make money off a perfect hedge.

I thanked them for their time and promptly looked up Bernard Madoff online. Nothing I saw was even a bit convincing that he had made a breakthrough in financial theory. Besides, this large financial firm was going to charge me roughly 2 percent to put my money with Mr. Madoff’s firm. I could invest my few shekels with Warren Buffett for no management fee at all.

[Kozak]

I should be in the company I just sold. I couldn't justify buying back in at a price higher than I had just sold at and waited. Stock hit $4 and I finally bit the bullet. I quickly rode it to $13 and bailed. It peaked at ~$16. I could kick myself for not staying in the whole ride.

Remember

Bulls get rich
Bears get rich
PIGS get slaughtered

[Reaganesque]

I used to be securities licensed and it was unusual to come across a client who didn’t know about “Buy Low, Sell High” but never, EVER followed it. See, they read this article in a magazine... Sigh.

[EVO X]

So is the DOW going to 900, or is gold going to 9,000?

The question is do you buy gold now?

[Kozak]

The question is do you buy gold now?

Not my question as I bought plenty at 240 to 300 an oz.....

[EVO X]

Not my question as I bought plenty at 240 to 300 an oz..... Nice call! I didn't get any that low. I bought some in the $400 - $500 range.

[eureka!]

Re#31 Good morning and yes, money too. Ben, Ben, what were you thinking? *sigh*

[Elsie]

Never ever....

It’s too easy.

Like trusting in Jesus for salvation - “It CAN’T be that easy!”

[Elsie]

But...

Do you guys actually HAVE the gold in your hot little hands or do you have a piece of paper stating that...

;^)

[Kozak]

Do you guys actually HAVE the gold in your hot little hands or do you have a piece of paper stating that...

Oh, 90%A. 10%B.

[EVO X]

Do you guys actually HAVE the gold in your hot little hands or do you have a piece of paper stating that

A few coins in the bank vault. If I were to buy more, I would go the ETF route.

[ninonitti]

that begins with someone saying “Psssst!! Buddy!”.

Or "It's totally legit...."

[Elsie]

You are NOT supposed to answer!

Now you will get tracked down!

[Kozak]

Come and get me copper! (;-0

[Elsie]

Arrgh!

I durn’t want ye copper, Matey - but yer GOLD!!!!

[Kozak]

Do you use one of these matey....

[Elsie]

rRrRrrRrrR!!!!

[SFC Chromey]

Schiff is talking about a rough domestic market until at least 2010, and that any quick fixes are going to do more harm than good.
He’s also been talking about gold, international fixed income and Asian markets. I think he is a bit off the mark with the international, because we didn’t see the separation most people expected.

However, if the US economy comes back a bit, international markets will heat up a bit too.