There’s a dark underbelly to the investing scene that is becoming more and more exposed as things deteriorate around the world: Mankind as a whole may be getting better (doubtful), but certain individuals are still greedy, avaricious, and deceitful.
All you need to hear to know what I’m talking about is Bernard Madoff, the latest guy to scam and cheat his way to the top, taking $50 billion (that’s billion, folks! Billions!!) with him and his investment strategies, bankrupting nonprofits and celebrities alike, no prejudice toward either one.
It’s an equal opportunity scam, but you feel sorrier for the nonprofits and elderly retired folk who lost everything than the moguls who can afford the loss with less radical change to their lifestyles. Steven Spielberg, Mort Zuckerman (editor-in-chief of “US News and World Report” magazine), and many other Palm Beach millionaires are suffering great losses, as well as “average” people who poured their entire life savings into Madoff’s investment schemes, thinking that they were set for the rest of their lives and now finding out that at 70 or 75, they might have to go work at WalMart for some extra support money.
We are just beginning to be able to assess the damage, as this news is so current that all the victims haven’t risen to the surface yet. Stay tuned. There is certainly more bad news to come about the Madoff scandal and those individuals and organizations financially affected.
And Madoff? Is he repentant? About as repentant as the Governor of the state of Illinois, Rod Blagojevich, who refuses to admit any wrongdoing or felonious activity concerning his desire to sell for top dollar the senate seat vacated by President-Elect Obama.
Which is to say: no repentance at all. No word of “sorry” or “oopsie.” “The twinkies made me do it.” “Greed got the best of me.” Nothing. Silence. Sure, their legal advice is probably “Keep your mouth shut; say nothing.” I wonder if they will ever — even if after convicted, God willing — say anything that tells us that they feel the slightest remorse for their behavior.
Madoff’s actions took place over a long time. There are interviews on television with investors in his company who said that back in the ’60’s and ’70’s and even into the ’80’s, Madoff was an upright guy. Nothing tricky. At least that they knew of, obviously.
But if you begin to put the pieces together about this man’s business policies, you start seeing that there was something woefully suspicious years and years ago. The fact that government and financial agencies didn’t investigate or have the power to stop him is a subject for another time. I’m focused today on the guy himself, and what kind of person can casually bankrupt nonprofits trying to do good around the world without batting an eye or missing a night of sleep.
Don’t tell me mankind is getting better. I don’t believe it. And I think you see the worst in us when it comes to money and bank accounts. It brings out every greedy, selfish, nasty attitude a human can have.
And somewhere along the way, those investors who were enticed by the promise of double digit earnings year after year with Madoff’s firm need to stand back and look in the mirror, take stock of their own culpability for being greedy enough to believe those promises. What ever happened to the “high returns, high risk” mantra that has been the foundation of Wall Street investing for decades? Did those people — Spielberg and Zuckerman included — just turn their investments over to others or did they actually believe that they would be immune to the high risk of losing everything because it was too good to be true? Which it almost always is.
I don’t know the answers to the questions I’m asking. It’s painful enough just asking the questions. But asking them is what we all need to do of ourselves: what is my own greed level in my investments? How gullible am I to fall for the scams and schemes of those who are promising me that if I am allowed to be a part of the special inner circle of investors, I can make a lot more money than the average Joe? Pride there? A bit of arrogance? You bet.
Doing your due diligence is good, but it’s not enough. The way things are going in the stock market, the investment environment and the political landscape around the world, we need to keep taking our moral and spiritual temperatures as well. They are, obviously and eternally, intertwined. And there are surely more Bernard Madoffs and Rod Blagojeviches out there lurking, waiting for guileless victims to fall into their traps.
Puts a whole new spin on the phrase “sound investing,” doesn’t it?
Rita is a successful private investor and leads four investment clubs where she has taught hundreds of women about stocks and finances. She is the chairperson of the board of an international non-profit organization and devotes much of her time to a variety of charity work.