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No. 9448
Anonymous
10th June 2022 Friday 11:11 am
9448
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>>9156
>As one of the quotes used multiple times in that video goes, they'll say "if this looks like a Ponzi then surely everything looks like a Ponzi". That line is true, but not in the way the originator meant.
Ponzi schemes are usually still quite easy to spot. The key sign that that's what an investment scheme is tends to be unrealistic yet consistent investment returns. You need to sucker investors into investing with you somehow. Why should they give you their money if they get the same kind of returns with more conservative asset classes. Also, to actually deliver those returns to at least a few people who have been your client for some time and thus not arouse suspicion, you have to keep bringing in new investors, and again, you'll only be able to do that consistently with promises of massive returns, which you can then back up by pointing at the sums you've already paid out to longer-standing clients.
If you look at Bernard Madoff, for some inexplicable reason, he seemed to be able to pay out consistent high returns that appeared to be almost completely unaffected by market crashes and other fluctuations. The reasons why he got away with it for so long were that he was very well connected in the finance industry as well as the Securities Exchange Commission, and just that people love a good lie, and that he and his employees worked quite hard to cover their tracks. His company had an entire department which did nothing all day besides pulling entirely bogus income statements out of their arses for their hundreds of clients. They were paid out an amount that seemed reasonable, at least given the fund's past performance, with some minor and equally bogus fluctuations over time, and then they concocted a list of securities that they then said they had invested their clients' money in, which seemed to corroborate the returns that were paid out.
Madoff got away with it because he was very skillful at keeping up his Ponzi scheme. It really only collapsed in 2008 during the Financial Crisis because there was a market-wide bank run. Without that, he probably could have continued it for a lot longer. Not all Ponzi schemes are that elaborate, but they don't have to be in order for you to spot them, because, again, the key telltale sign is always unrealistic consistent returns.
Worth noting that a return isn't unrealistic because it beats the market and you achieve it one time. Any retail investor can get lucky and make an absolute killing one time on a stock that goes through the roof. But it's a trick that you simply cannot pull off every time in the long run, and whoever promises you otherwise simply isn't worth your money.
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