Having watched The Wolf Of Wall Street, The Big Short and, most recently, The Wizard Of Lies, one cannot help but feel that navigating the world of investors is akin to wading across a crocodile-infested river!

It is a lot safer to navigate coffee shops – and a lot more tastebud-rewarding! The next best bet, of course, would be to watch movies amid a significant amount of uncertainties in the stock market that has been sidelining investors.

In The Wizard of Lies, veteran actor Robert De Niro portrays Bernie Lawrence Madoff when the latter was arrested for orchestrating the largest Ponzi Scheme that US prosecutors estimated to be more than US$50 billion during the 2008 subprime crisis that melted the stock markets.

Stretching back as early as the 1970s, Madoff’s Ponzi Scheme was never discovered until he was left with inadequate liquidity to meet fund withdrawals.

Ponzi Schemes are dependent on “new money” from investors coming in to make good the promised returns to the “older money” put in by earlier batches of investors hence cash flow is very important to the perpetrators carrying out such a scheme.

So once the cash runs out, investors will no longer be able to get any returns but fund redemptions and withdrawals during a bear market are often the final nails in the coffin of such grand schemes.

While Madoff utterly deserves the 150 years behind bars for ruining the lives of 4,800 investors, can such a scheme run undetected if not for the greed of investors?

Some have argued that Madoff’s funds looked bogus as they have never failed to register gains on more than 10 percent annually even when the broad markets were down. So how can retail investors – even the high net worth individuals – be spared when investment banks such as JP Morgan, HSBC and the Swiss banks were taken in by Madoff?

In the movie, Madoff has been portrayed as a sociopath (he even asked his interviewed if he was one), a self-pitying, self-deluding liar who pretended to care about everybody, including his own family, when the crimes he committed were enough to destroy his wife, sons and relatives.

Ultimately, his wife of 50 years abandoned him, both his sons died and he is now rotting in the US prison awaiting his final calling.

This is very typical of con artists in the stock markets. They are smooth, sweet-talking, superficial and extremely good at lying. These people are pathological liars.

The next time you meet someone who promises you high returns paints you a rosy picture of an investment or tries to sell you something way below what it is worth, run away! Run as fast as you can!

Greed gives birth to scams and you are as guilty as the person who scammed you because you encouraged him to do so.

We, the silly investors of Singapore, were once the ATM machines of scam companies from China! We shall try our best never to fall for scams such as Ponzi Scheme, Sex for Credit scams at the coffee shops or the monkey in the village tricks.

Caveat Emptor!

Related post:

This Is How Stock Market Operators Make Your Money!

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