The docuseries is revetting. If possible, if interested, users should watch this. Saw the four part series in one go…
Amazing, something similar to Scam 1992 about Harshad Metha…
Quote
The global financial crisis showed us you cant trust the wall street, cant trust investment bank, cant trust the financial analyst, cant trust the rating agencies and the regulators. No one went to jail except for Madoff and few of his staff…No one from rating agencies, regulators, or financial analyst went to jail. Investment banks got bailed off but No one bailed out Madoff victims…
Yes, the system which allowed guys like Madoff thrive and everyone involved should have been equally penalized. But everyone else slipped away once they got the high profiled scape goat.
I feel its more of a diversion from real issue even I think the documentary mentions that as well. That time it was financial crisis which questioned the system and to divert the issue , Madoff was exposed . We can see now so many orders against scams etc ( I feel authorities are doing great job) but it they are diverting against complexity of Adani issue. News are running about Arshad Warsi Scam etc.
Best take away from Documentary was even the investors who cashed out of investment ( with no faults of there own) were traumatized as they were asked to return back there earning which most of it was taxed or spent. Same thing was about to take place in india where Govt was about to make a rule that if Banks goes bust then Depositors money can be used to save it, this was most insane thought i ever came across it was like Profit is mine alone and loss is everyones.
I thought this was quite fair distribution as people who made excess money in the ponzi scheme paid for those who lost their entire savings. Fully agree, it was no fault of theirs, but dont you think, it was just fair so that there was an equitable distribution. The administrator took all of his assets and his wife’s and utilized it to pay back the people who lost.
In Yes Bank case, Rana Kapoor assets should have been taken in full and sold and given it back to AT1 Bond holders in proportion of their amount invested. Wonder why this was not done. He might be in Jail, but his family is living in all luxury.
I remember this incident, but this was absolutely unfair to make use of the depositors money to bail the bank. Is this like to like with the above case. In the case of investors in Madoff, they were quite savvy and they were aware of the risk they would be taking when investing. Depositors are the not the same, don’t you think.
I have simple rule, don’t play the game which you can’t understand or win. These are very complex issues which can’t easily explained or understand. I stay away from these as well , playground is very big for us to play other games which we understand
I would agree on this but what was done in madoff case (which was later taken away by court) was like let say you redeemed AT1 bond and use it for your XYZ now later you were asked to return your money even you were not involved in scam was just retail investors.
Every retail investor would like to stay away from these schemes, but how they every come to know?
I saw a recent interview of Anil Aggarwal with Anil Singhvi. It was pathetic, the way, the interviewer was bending his back instead of asking pointed question to the owner as to why he was trying to shove, the zinc business to HZ. The answer everyone knew was simple, he wanted the money to repay Vedanta Resources debt and this was the only way. The way AS was squirming and skirting around and asking the question without touching here and there made me feel sick. It was as if the interviewer met God himself and was reluctant to ask relevant question.
All these media guys are tiger in front of small timers.
Well only reading like a lawyer and Risk Manager mindset and your own experience will save you.
But its ugly truth every bad incident ,scams etc directly or indirectly every citizen is affected.
Profit is individualistic and losses are socialistic.
Eg. If banks are affected we will be indirectly paying by reduced interests or higher loan rate or any govt scam we will have our tax money balling out or delayed projects.
I one time invested in a debt fund got indirectly peanalised for less returns due to some defaults happened 2-3 years back. Funds don’t reduce NAV in one go but over the years. I read about all the underlying bonds at high level but didn’t know that defaults are carried forward. Was like खाया पिया कुछ नही, गिलास तोडा बारह आना. Now i read details about past defaults etc before investing
Consider oneself lucky if one can navigate from birth to death without too much slippage and falls There is very little we can do when everything around is beyond our control.
The thing that stuck me in the docuseries is that, this guy never invested the billions he received. He just kept it in a bank account and paid back the investors with a great returns. I can understand people invest in high risk investments and lose money, but this guy just kept the money and gave it back with high returns from the fresh flow of funds. Never understood why he did this.
Another trait was, he never discussed in detail about his investment with the investors. He would threaten them to take back their investment if they asked too many questions. People used to get scared and stop asking him questions. I understand Warren Buffet and Charlie Munger do not talk much and their entire interaction is once a year when the meeting happens. There is one other guy who copies Warren Buffet and from his interviews, he too seems to do the same thing…hope nothing is cooking…
Wonder this trait is great or not? Hope all the money is indeed invested and not kept in any bank account…
This brings back to my earlier query for which I never got an answer
Market Makers are critical for an ETF. How come, none of the offer document of ETF ever mention who the market makers are. I have read somewhere that during the March 2020 period, few market makers refused to do their core job which eventually resulted in periods where liquidity in ETF were tied up. I had written to SBI ETF and they did not reply as to who their Market makers were for SBI ETF Nifty 50 and Nifty next 50. I am sure it would be their own in house subsidiary, but why not being transparent and mention this.
Last year SEBI had directed AMCs to appoint at least two market makers, who are members of the stock exchanges, to provide continuous liquidity for ETFs. Sources I spoke to last year (for an article I was writing) said that EPFO is the largest owner of ETFs (retail investors own only max of ~10%)… Market makers is one aspect but lack of awareness of pdt & mechanism amongst retail investors is a big prob area… This can only be sorted if AMCs, exchanges , regulators, AMFI & brokerages create awareness about the product…
There is very little we can do when everything around is beyond our control.