Wednesday, March 5, 2014

Ponzi Schemers May Be At It Again

Ponzi schemers, I believe, feel a lull in regulatory oversight and are out there soliciting money in any way that they can. I own a company with the words "Family Office" in it and as a result, I get inundated with emails from so called investment managers who are looking for easy money. My "Family Office" email is on a list of family offices and is sold to these email spammers as a legitimate place that they can market their investment management "expertise." Most of these emails are basically the same. They showcase their returns and how they always seem to beat the dog do-do out of the S&P 500. Well, in my opinion, it is dog do-do the returns that these firms are showing.

Another thing that they do is call themselves "Alternative Money Managers." You see, they cannot appeal to family offices with boring old investments likes stocks, bonds and mutual funds. So, what they do is give themselves a unique category of investment expertise in an area where no one else is involved. In fact, a lot of times, they create their own benchmark index to compare themselves against. These strategies are often referred to as "hedge funds."

Here is what these idiots do not know. I subscribe to Morningstar Office. They wrote the book on research and they just so happen to have all the hedge funds that are registered in their system. Just for fun, I like to look up these "hedge funds" that beat the dog do-do out of the S&P 500. Of course, what I always find is that they are not covered by Morningstar research. If they are not covered by Morningstar research, then in my opinion they are not really hedge funds at all.

Hedge funds that sell to accredited investors have to be registered with the SEC, unless they meet an exemption. However, these idiots who are marketing to my family office are not registered with the SEC as a hedge fund, in almost of the cases that I research. They might be registered with a state securities department or the SEC as an investment adviser, but not as a hedge fund. So, right there you have to wonder what in the hell is going on. They are calling themselves a hedge fund, but yet they are not registered as one. Of course, these idiots have no idea that you cannot do that, yet here they are firing away with their emails. All they really care about is getting some fool to respond to their email solicitation, so they can buy that new Lamborghini.

They prove themselves to be idiots by their email in the first place. Any family office worth its weight is going to have someone like me guarding the door. The last thing they are going to do is respond to an email where a so-called "hedge fund" beat the S&P 500 by 250% over the last five years. These family office guardians are smart people and like me, know that the odds of that spam email being accurate is slim to none. In addition, these family office guardians, like me, do their own research and know where to find legitimate research on hedge funds. They are not going to invest a nickel based on some stinking email. How freaking stupid are these idiots that send out these emails anyway?

The main point that I wanted to get across is that do not respond to email requests from "Alternative" money managers who beat the S&P 500 by 250% over the last five years. Odds are they are full of dog do-do.

Be careful out there folks. Ponzi schemers are out there everyday trying to steal your money.