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  1. #1
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    Jul 2004
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    People burned by the Madoff scam

    So I was reading how the victims were pleading to judge Chin for maximum jail sentence.

    1. There was one cleaner who lost all his savings and now working 3 jobs living hand to mouth. You lose the savings, but I don't see how that's related to living hand to mouth. And everyone knows not to put all your eggs in one basket.

    2. Charities that lost millions. Again I don't see how it been a charity should mean anything to the judge, they were too greedy and were lured by the too-good-to-be-true returns.

    Those people whose life have been made miserable should know it was coming. The mantra is 80% equity 20% bond, with various forms of diversification. They were too greedy and put 100% into one guy.

  2. #2
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    Quote Originally Posted by hellind2 View Post
    So I was reading how the victims were pleading to judge Chin for maximum jail sentence.

    1. There was one cleaner who lost all his savings and now working 3 jobs living hand to mouth. You lose the savings, but I don't see how that's related to living hand to mouth. And everyone knows not to put all your eggs in one basket.

    2. Charities that lost millions. Again I don't see how it been a charity should mean anything to the judge, they were too greedy and were lured by the too-good-to-be-true returns.

    Those people whose life have been made miserable should know it was coming. The mantra is 80% equity 20% bond, with various forms of diversification. They were too greedy and put 100% into one guy.
    Not all people/charities put all 100% of their money into Madoff. I feel bad for those that did though

  3. #3
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    Perhaps greed was involved, but doesn't only a fool not follow the good returns that seem consistent over time?

    -mike
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  4. #4
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    A lot of these people were brokered into Madoff scams. He had solid returns year after year that weren't so unrealistic as to attract the attention of the government. Because of the nature of these hedge funds, many weren't insured.

    It's a combination of greed on the part of a lot of people, but fundamentally they were swindled by a professional thief. They're still victims.

  5. #5
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    Quote Originally Posted by emorales View Post
    A lot of these people were brokered into Madoff scams. He had solid returns year after year that weren't so unrealistic as to attract the attention of the government. Because of the nature of these hedge funds, many weren't insured.

    It's a combination of greed on the part of a lot of people, but fundamentally they were swindled by a professional thief. They're still victims.
    Very well put. I hope to see more posts from you, emorales.

    -mike
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  6. #6
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    THE people who invested all of their money were stupid or just pure greed like the man him self.

  7. #7
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    I wouldn't say it's greed at all, I would say that these people were tricked into thinking there was no better place for their money.

    Everyone in the world wants the best return on their money, if I promise you year after year solid return then obviously people will get involved.

    It's a shame, sadly the prison sentance won't bring back all of the money thats been lost by this monster.

  8. #8
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    Madoff will never get out of prison. This is small consolation for victims, but perhaps it will deter others from doing similar schemes.

    As far as people putting their money into risky investments, we saw this with 401k plans by many older people. Conventional wisdom says that as you get into the retirement years, you should be putting your money into less risky investments. Unfortunately, a lot of people did not and that is why they were hit worse than they should have been. Simple greed certainly played a part in a number of these situations; however, I am sure others were likely forced into trying to get more money to help pay for extended family members who have struggled or medical bills.

  9. #9
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    Quote Originally Posted by RH-Scott View Post
    I wouldn't say it's greed at all, I would say that these people were tricked into thinking there was no better place for their money.

    Everyone in the world wants the best return on their money, if I promise you year after year solid return then obviously people will get involved.
    Exactly. If I told you that I extensively researched all of my investment options, and then I rejected the top five that were likely to be the most profitable, because I didn't want to be too greedy, who on Earth would say that I was making a wise choice?

  10. #10
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    Quote Originally Posted by bdkane View Post
    THE people who invested all of their money were stupid or just pure greed like the man him self.
    Perhaps you should do a little reading on the subject before drawing that conclusion. You'd find out that the scandal worked because on the outside looking in, it was the polar opposite of a Ponzy scheme.

    Most Ponzy schemes offer impossible returns in a short period of time. As a result, they usually fail relatively quickly. Madoff did something very different, in offering consistently high, but not impossible, returns over many years. Look at what Charles Ponzi offered to investors to get a real idea of the standard. Ponzi's 50% return in 45 days was absurd, but Madoff's 10% year-over-year certainly weren't "blow me away" money... they were just unusually consistent, especially since his investment method (collaring blue-chips) wasn't exactly known for consistency.

    But the most important thing to understand is that a large portion of his base investors were charities. He did this intentionally, since charities didn't often request major withdrawals out of the blue. In other words, the guy specifically targeted groups he knew wouldn't withdrawal often, offered annual returns that weren't particularly shocking, and kept his base customer group relatively small.

    He preyed not on the greedy, but groups and individuals that wanted reasonable and consistent returns. I highly doubt you'd find a harbinger of greed at the (now defunct) JEHT Foundation offices.
    A well-reasoned assumption is very close to fact.
    - Adorno

  11. #11
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    Quote Originally Posted by IvialisRyan View Post
    Exactly. If I told you that I extensively researched all of my investment options, and then I rejected the top five that were likely to be the most profitable, because I didn't want to be too greedy, who on Earth would say that I was making a wise choice?
    Very well put. "If it seems too good to be true..." did not necessarily apply, as well, because the returns were not outlandish.

    The stated returns were good, not great. Too bad these "good" returns were fake.

    -mike
    Mike G. - Limestone Networks - Account Specialist
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  12. #12
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    It just shows how important it is to diversify. Don't put all your money into the same investment.
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