@Drew
It is unfortunate that so many people were suckered into this scheme.
But as you said, some advice out there gets sold based on hype and this is why people are taken advantage of and the smart ones profit.

This is essentially, a way for the gatekeepers to keep out the public out of their inner circle.

toms last blog post..Expense tracking was a real smack in the face

Brad Shorrs last blog post..The Contact Page – How to Write a Website, Chapter 4

toms last blog post..Expense tracking was a real smack in the face

As I was saying to Tom, I have never heard Cramer speaking and I am not personally in a great position to make informed comment on this matter.

I did do a quick Wikipedia search on him after reading Tom’s comment, and I do note that he has had his fair share of controversial recommendations, particularly in relation to Bear Sterns as well as certain hedge fund techniques. So at a quick glance, I can see where Tom is comming from.

That said, it sounds as though you have followed him a great deal, and if he cautions people against taking his investment selection recommendations at face value, then that seems like a sensible course of action.

I think this emphasizes the importance of putting recommendations from talk show hosts in their proper context, doing our own independent research and obtaining our own independent professional financial advice where appropriate.

Brad Shorrs last blog post..The Contact Page – How to Write a Website, Chapter 4

Unfortunately, I am not particularly familiar with either Cramer or Stewart, so I am not personally in a position to make informed comments about them in particular.

One of the interesting things about the Madoff fraud is how we managed to sucker in a lot of these ‘smart investors,’ and it was not only the general public who were fooled, but wealthy families, bankers and fund managers who, one would have thought should have known better.

That said, I do take your point, and it seems all too often that the general public make investment decisions based upon media hype, often without a proper understanding or appreciation of the risks involved.

Another thing is that media hype often gathers late in any bull run cycle, after substantial gains have been made and there are rags to riches stories to tell. It can often be the case that those who get in late any upswing cycle lose out if and when the bubble bursts.

I have said a few times that this is how the media gets the general public suckered in so the smart investors get in and out at the right times and profit.

toms last blog post..Expense tracking was a real smack in the face

Exactly right. The Madoff case does make you wonder just what else is lurking behind the American financial system.

As we can see from cases like this, it will not only be direct perpetrators of fraudulent activities who are found out, but those who entrust shareholder or client funds to people like this can expect to come under a great deal of scrutiny.

Fund managers and their lawyers will certainly have a busy time in shoring up those ‘extensive diligence’ tests.

Hi Karen,

Absolutely. Others are not perfect and that is why it is important that fund managers, as auditors and corporate watchdogs, need to exercise an appropriate level of diligence in terms of keeping money managers accountable.

It would probably be unreasonable to expect individual investors to have detected fraud of this level. Nevertheless, many of us fall victim to less sophisticated scams and it is the responsibility of individual investors to ensure that they do not make investments without having a proper understanding of the nature of the investments which they are making.

Hi Mark.

Damn right it will!

Andrews last blog post..Diligently handing money over to scam artists