Sorry, I don't follow this at all. Bernie Madoff skinned greedy fat cats who
should've known better and it's a straw man in this discussion.

Lastly, any person can call their local Edward Jones or other brokerage office
and get top notch investment advice and choices. As long as we protect people
from their lack of discipline and bad choices, the problem remains unsolvable.

What would the reaction be if some supreme savings overlord were to decree
a level of savings that makes it impossible for members here to afford their
motorcycles? I guess that also begs the question, "If we force people to save,
would we have to deny them credit?"

quote
Lastly, any person can call their local Edward Jones or other brokerage office and get top notch investment advice and choices.
unquote

Er! Perhaps somewhat overstated and I do hope you are not Series 7 registered !

When we moved to the USA we brought a little bit of money with us and consulted and invested with financial advisors. I don't know how much of it was fraud and how much of it mismanagement, but it was a disaster. During that time I learned a bit and am doing it myself. It didn't go too bad...

Greedy? absolutely! Fat cats? not all. I believe most all were well-off, but not all were super wealthy. The beggest mistake many of his investors made, was to go "all-in" wioth a sinlge investor, rather than hedge themselve swith other conventional investment.

I think there was also a reference too the real estate boom and other stock market booms as pyramid schemes in a sense. Althouhg obvisouly not the same. There are similarities. The biggest factor is greed, and getting something for nothing.


I did enjoy the program after the superbowl where the CEO struggles to do any of the entry level positions in his corporation, even getting fired from one. Although, obviously physical labor is different that manageing a corporation, but shouldn't it make you question whether or not theat CEO is deserving of around 100X the pay level of those employees. Maybe 10X or 20X... as it was decades ago, but the extreme scale we see now seems difficult to justify. The arguemnt is that there is greater supply in the lower level positions. And there is a shortage of "qualified" top level management and therefore they are deserving of the high levels of compensation.

I'm not registered and don't have a bias towards Jones, just sayin' that anyone with a brain and a little money can get help investing their savings. I never said an investor has to do everything his/her financial adviser recommends, but there are multiple sources of investment philosophy and advice.

His clients were getting out sized returns for years; and they didn't question
their statements as long as they thought they were beating the market.

I was in the business appraisal business for a few years, appraising the value
of closely-held companies for trust, estate and sale purposes. My mentor, a
very smart fellow, used to say, "Don't assume something exists because of a
paper entry. Go count the bricks."

Madoff's investors believed their phony account statements; never checked
closing trade prices to reality. They never counted the bricks.

No, it doesn't. If I were an owner, I'd have a say in the matter, but the owners
of that company have had their say. So be it. Buy some shares; go the stockholder
meeting; and, have your voice in the matter.

Counting the bricks would have been very difficult if not impossible for an individual investor. Madoff acted as his own custodian, and most high-end outfits that do that sort of thing do not open their operations to the public unless you're investing a significant amount of money with them. Besides, since a majority of shares are held in nominee name (electronically) through DTCC it's very difficult to actually verify the veracity of holdings. You have to trust that the custodian has good internal controls AND has a good external auditor. If a fund manager is crooked and as figured out a way to doctor the differences between his or her computer system and the electronic record holder it would require something like a court order to actually examine the original records.

While many of Madoff's clients were wealthy, a large number were also charities. And a lot of individual investors also put money in through feeder funds that invested in Madoff's scheme, so there were a significant number of 'little guys' involved.

This was my introduction to investing. Fortunately, I was in my mid-30's and had just bought my first CD from them. Unlikely as it may seem, I was contacted 20 years later by a court in Hong Kong re a settlement, and got about half my money back. Lesson learned.

So, the option is to cross one's fingers? I move substantial portions of my holdings
from time to time amongst organizations like Vanguard, Schwab and Treasury Direct.
Is that a dead bang guarantee? Nope, but if I move a holding, at that moment, I'm sure.

As I read the stories, Madoff's investors rec'd monthly statements listing what
turned out to be phony trades in their accounts. I also read that the settlement
prices on the statements didn't bear any resemblance to the stock's price range for
that day. I'm not sure how pervasive that was, but I'm guessing it happened a
lot because posting the real settlement prices would not have produced the gains.

Why find excuses for lax oversight and ownership? I don't understand that at all.