This article at Yahoo! News says that the supposed profits handed out by Madoff routinely amounted to 11 percent to 15 percent per year. And long-term investors, are worrying today.
Because they had got more from Madoff than what they had originally invested!
Look at this:
"Jonathan Levitt, a New Jersey attorney who represents several former Madoff clients, said more than half of the victims who called his office looking for help have turned out to be people whose long-term profits exceeded their principal investment.
"There are a lot of net winners," he said.
Asked for an example, Levitt said one caller, whom he declined to name, invested $1.8 million with Madoff more than a decade ago, then cashed out nearly $3 million worth of "profits" as the years went by."
I used to think 12% is a fair return on your investment. Now it looks even that is too high.
The problem with huge returns is that they are not sustainable in the long run- either someone is cheating, or someone is losing a lot. Things have to average out one day or the other. There is also the possibility that where the returns are obscene, obscene people want to get in- easy money pulls in nasty people and drives out honest people. I won't wonder if Real Estate and IT industry has a lot of politician-criminal nexus capital.
We have to do something about people getting money too easily- it looks good if you are likely to get some in your hands, but be warned, some day you will get burned.
The beauty of stopping the easy money flow is that it would put the professional politicians and the criminals out of business- they don't like to work hard for paltry returns.
18 years ago, Bas, I was astounded at the brazenness and the scale of deceit One Harshad Mehta, who eventually passed away a while ago, left without accounting for all the money siphoned off or all the sraws through which they were sucked out.
ReplyDeleteI have come to the conclusion over time that it is impossible to do business without crunching up numbers...it is almost impossible to be an adult without having your hand in the candy jar....if you don't you are a retarded curiosity...you could have one bullseye, maybe two, three...or maybe a whole fistful of them. Depends upon how large your palm is and how long the take is...
If the child wants a vanilla bar, daddy dear has to take five rupees for letting a man into his saahib's office.
If the child must enrol ar a delhi traffic police constable, eight lakhs must change hands and plenty of massaging along with it. So when the constable pulls you up as you are waiting for the light to turn green and issues to you a 1500 fine for traffic light jumping, know that he is merely repaying the loan his papa took to get him into the job.
Now, with the likes of madoff and raju and lehmannbros or citi or x, y or z...the terminology may be more sophisticated, but the methodology, the deed, the excuses, the greed, the lack of self-control and conscience are all the same...identical twins.
If Mrinal Sen were to make a movie like this again in Telugu, the likes of raju and madoff could well be Venkiah and Kishtaiah.
Thanks for posting this comment. I enjoyed it. Really. There is nothing like a dose of truth to buck up the spirits. You tell it as it is. Thanks. Thanks a lot. Because, of all the hurts, it is the hurt caused by the dissembler, the masked truth, that hurts the most.
ReplyDeleteNow next question: I think service with a margin is justified. Right. At what point does this turn into corrupt practice? Not theoretically or ideally or according to law, but practically.