How to Smell a Rat E-Book

Kenneth L. Fisher

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 298

Veröffentlichungsjahr: 2009

Beschreibung

A timely guide to uncovering financial fraud 2008 and 2009 will be remembered for bear markets, a globalcredit crunch, and some of the largest investment scams ever. Butthese scams are nothing new, they've been repeated throughouthistory, and there will certainly be more to come. But the goodnews is fraudsters often follow the same basic playbook. Learn theplaybook, and know how to ask the right questions, and financialfraud can be easy to detect and simple to avoid. In How to Smell a Rat, trusted financial expert KenFisher provides you with an inside's view on how to spot financialdisasters before you become a part of them. Filled within-depth insights and practical advice, this reliable resourcetakes an engaging look at recent and historic examples offraudsters, how they operated, and how they can be easily avoided.Fisher also shows you the quick, identifiable features of financialfrauds and arms you with the questions to ask when assessing amoney manager. * Prepares you to identify and avoid financials cams that couldinstantly destroy your wealth * Contains examples that highlight how financial frauds arecommitted * Provides questions everyone should ask before entering anyinvestment endeavor With How to Smell a Rat as your guide, you'll learn howto protect your interests and assets from unnecessary losses.

Leseprobe

Table of Contents

Fisher Investments Press

Title Page

Copyright Page

Acknowledgements

Introduction

Don’t Let Your Money Get “Madoff ” With

Just One Thing

Big or Small—a Con Wants ’em All

Bear Markets Don’t Cause Scams

Normal Market Volatility Is Just that—Normal

Chapter 1 - Good Fences Make Good Neighbors

Sign #1 Your Adviser Also Has Custody of Your Assets.

Chapter 2 - Too Good to Be True Usually Is

Sign #2 Returns Are Consistently Great! Almost Too Good to Be True.

Chapter 3 - Don’t Be Blinded by Flashy Tactics

Sign #3 The Investing Strategy Isn’t Understandable—Is Murky, Flashy, or “Too ...

Chapter 4 - Exclusivity, Marble, and Other Things That Don’t Matter

Sign #4 Your Adviser Promotes Benefits, Like Exclusivity, That Don’t Impact Results.

Chapter 5 - Due Diligence Is Your Job, No One Else’s

Sign #5 You Didn’t Do Your Own Due Diligence, But a Trusted Intermediary Did.

Chapter 6 - A Financial Fraud-Free Future

Takes a Pirate to Catch a Pirate

Due Diligence Checklist

Hiring the Right Adviser

Further Reading

Appendix A - Asset Allocation—Risk & Reward

Appendix B - Same But Different—Accounting Fraud

Appendix C - Minds That Made the Market

Notes

Index

About the Authors

Fisher Investments Press

Fisher Investments Press brings the research, analysis, and market intelligence of Fisher Investments’ research team, headed by CEO and New York Times best-selling author Ken Fisher, to all investors. The Press covers a range of investing and market-related topics for a wide audience—from novices to enthusiasts to professionals.

Books by Ken Fisher

How to Smell a RatThe Ten Roads to RichesThe Only Three Questions That Count100 Minds That Made the MarketThe Wall Street WaltzSuper Stocks

Fisher Investments Series

Own the WorldAaron Anderson 20/20 MoneyMichael Hanson

Fisher Investments On Series

Fisher Investments on EnergyFisher Investments on MaterialsFisher Investments on Consumer StaplesFisher Investments on Industrials

FISHER INVESTMENTS PRESS

Copyright © 2009 by Fisher Investments Press. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Fisher, Kenneth L.

How to smell a rat : the five signs of financial fraud / Ken Fisher with Lara W. Hoffmans.

p. cm.—(Fisher investments series)

Includes bibliographical references and index.

eISBN : 978-0-470-55272-8

1. Fraud—Prevention. 2. Commercial crimes. 3. Investments. 4. Swindlers and swindling. I. Hoffmans, Lara. II. Title.

HV6691.F57 2009

364.16’3—dc22 2009021631

Acknowledgments

Both 2008 and early 2009 were very tough capital market environments. They were terrible times, made all the more so by the discovery, late in 2008 and early in 2009, of some pretty big, ugly, heinous financial frauds. Though scams are typically outed at and around bear market bottoms—and this was no different, just a bigger bear market hence bigger outing of scams—something struck me about the media coverage of all these scams. They were missing the very easy and obvious unifying element all the scams had in common that would make it simple and easy for investors to avoid being scammed. (I won’t tell you here, you must read the book to find out.) And in that, I saw a book not only that I could write, but that I should write, and now was the time.To me, this was important—it was worth a bit of my time to get it out, fast.

And to get it out fast while keeping 100 percent focused on my day job required some major help, so I turned to Lara Hoffmans, who worked with me on both of my last two books. I described the book and gave her ideas, names to pursue and research, and a myriad of inputs. She then put together an organizational plan which, once blessed, she pursued in doing the heavy lifting in constructing an entire first draft of the book.

I am a writer—love writing and have for a long time. Pretty much in the small percentage of my life when I’m not directly working, I’m either putting time into my family or one of three hobbies. Writing is one of them. Now writing is mostly re-writing, editing yourself, seeing how you can say what you wanted to say but better, shorter, punchier, and with less words—and all that’s fun for me. But books can also be a lot of work. But in this one Lara did most of the grunt-work heavy lifting, and I got to have most of the fun. So I really do have to acknowledge Lara for over-the-top contributions to making this book a reality. She did so on my last two books, but with each book she seems to pull off a greater portion of the total labor load.

Also special thanks are necessary to Dina Ezzat, from my firm’s Content Management group. She helped out enormously in running down sources and citations, and generally helping with nit-picky tactical details. That helps tremendously and saves me endless time. Evelyn Chea, also in our Content group, always does a great job of copy editing our work and was no exception this time.

I also must thank Michael Hanson and Aaron Anderson, both very accomplished writers in their own right and senior members of our Content group. Though already carrying an impressive load of responsibilities, they helped by picking up the slack when I redirected Lara to help me on this book. And thanks too to Fab Ornani, who heads the Content group and does too many things for his own good, among them being our in-house web guru. Fab directed and load-balanced the whole group while I had Lara, Dina, and Evelyn distracted.

I also owe a debt of gratitude to both Marc Haberman, our Chief Innovation Officer; Molly Lienesch, our branding manager; and Tommy Romero, group vice president of marketing, who handled all the non-writing efforts that went into this book. I didn’t have to do anything at all in this regard. And, of course, Fred Harring, Tom Fishel, and Nicole Gerrard gave the manuscript a close read for legal issues—which I appreciate immeasurably. I’d hate to be sued just for trying to prevent people from losing their money to a con artist.

As always, Jeff Herman, literary agent extraordinaire, contributed his views on what would make this book of interest to you. He keeps his hand on the pulse of book readers and has a much better sense of what you want than I ever could. And more than ever, I must thank the team I work with at John Wiley & Sons including David Pugh, Joan O’Neil, Nancy Rothschild, and Peter Knapp for their help. This is the first time with one of my books that I didn’t come up with the title; they did. It is legendarily and notoriously difficult for book authors to get along with book publishers; but they make it easy.

Clients at my firm sometimes get irked, thinking I take time away from work for these books, which I should be spending on them. But I never do, never have. I always work a minimum 60-hour week—always have—and most weeks it’s more like 70 hours. I indulge my writing hobby after that on weekends. As with any hobby, the release recharges me for my “day” job. Unfortunately, the person overwhelmingly who gets short changed when I do this is my wife of 38 years, Sherrilynn, who I never get to spend as much time with as I should and who is always patient with me as I exert myself on any of my hobbies. To her I always owe a debt of gratitude and particularly so when I launch off on writing which requires longer sustained bursts of energy than my redwoods hobbies.

Finally, thank you for taking time with this book. I’ve done five books before and had two New York Times best sellers. If even two of the five signs of financial fraud resonate in your head like a bestseller and keep you from being scammed by a con artist, having put the little time I did into this book will have been very worthwhile for me.

Ken FisherWoodside, CA

Introduction

Imagine this:

Jim’s a decent, hard-working, working stiff—frugal, with a nice nest egg. Between his job, family, a serious Saturday golf addiction, and some community commitments, he hasn’t the time, know-how, or inclination for investing details. And there are so many confusing options—tens of thousands of mutual funds, thousands of money managers. Hedge funds. Brokerage products with confusing names. Too much! So he turns to friends for advice—like you might. Turns out his golf partner, boss, and a few fellow church members all invest with the same adviser—have for years—Mr. Big Time.They swear by him!

Big Time is pretty famous—held a big government post in the ’80s. He manages several billion now, mostly for rich folks—way out of Jim’s league. Big Time is so big, he’s his own broker-dealer—Big-Time Portfolios, Inc. Jim’s friends say Big Time never had a down year—not 1987, not in the 2000-2002 bear, and not the most recent bear. His returns look pretty darn stable—and after a few rough years, stability sounds good to Jim.

Jim’s golf buddy fixes a meeting. Big Time’s office is posh, including photos of Big Time with diverse celebrities. All of the last three Presidents. Brett Favre. The Pope. Bono. There’s Big Time flying his private jet.Winning a regatta in his yacht. He does well—it shows. He’s dripping with success.