Shyam
We are now witnessing the rather unedifying spectacle of young Trivedi regurgitating his thought-stopping 'Amway' mantra on your Blog. Unfortunately, the systematic reaction of all deeply-deluded cult adherents (when challenged over the authenticity of their beliefs) is to retreat behind a wall of their group's complex, pseudo-scientific hocus-pocus, and then steadfastly pretend that anyone who can't understand it, must be stupid.
Interestingly, Bernie Madoff used essentially the same tactic when challenged by free-thinking journalists.
At the beginning of 2001, Madoff had acquired absolute control over 6 - 7 billions dollars. Most financial journalists believed Madoff to be managing these capital assets on behalf of wealthy individuals. Indeed, this part of his operation was (then) officially listed as 'being amongst the world's three largest hedge funds.'
According to a May 2001 report in MAR Hedge (a respected trade publication). 'What's more, these private accounts, have produced compound average annual returns of 15% for more than a decade. Remarkably, some of the larger, billion-dollar Madoff-run funds have never had a down year.' When, in 2001, Madoff was asked by a free-thinking Journalist exactly how he accomplished these 'remarkable' returns, he smiled knowingly and said:
'It's a proprietary strategy. I can't go into it in great detail.'
Jeffrey Tucker, partner and co-founder of Fairfield Greenwich (a New York City-based firm that marketed Madoff's funds) was equally evasive:
'It's a private fund. And so our inclination has been not to discuss its returns.'
One of Fairfield Greenwich's most sought-after funds was 'Fairfield Sentry Ltd.' (managed by Bernie Madoff). 'Fairfield Sentry' declared assets of '$3.3 billion.' One of its glossy 'offering memorandums' described Madoff's strategy this way:
'Typically, a position will consist of the ownership of 30-35 S&P 100 stocks, most correlated to that index, the sale of out-of-the-money calls on the index and the purchase of out-of-the-money puts on the index. The sale of the calls is designed to increase the rate of return, while allowing upward movement of the stock portfolio to the strike price of the calls. The puts, funded in large part by the sale of the calls, limit the portfolio's downside.'To options traders, that is what is known as the 'split-strike conversion' strategy. In simple terms, it means Madoff claimed to be investing primarily in the largest stocks on the S&P 100 index (like General Electric , Intel and Coca-Cola). At the same time, he claimed to be buying and selling options against those stocks. For example, Madoff would claim to have purchased shares of GE and to have sold a call option on a comparable number of shares (i.e. an option to buy the shares at a fixed price at a future date). At the same time, Madoff would claim to have bought a put option on the stock, which gave him the right to sell shares at a fixed price at a future date. Madoff's 'remarkable' strategy, in effect, claimed to build a protective boundary around a stock, limiting its upside while at the same time protecting against a sharp decline in the share price. This so-called 'market-neutral strategy' was supposed to produce positive returns no matter which way the market went. In 2001, using this 'split-strike conversion strategy', 'Fairfield Sentry Ltd' claimed only to have had four down months since its creation in 1989. In 1990, 'Fairfield Sentry' claimed to be up 27%. In the following decade, the fund was supposed to have returned no less than 11% in any year, and sometimes as high as 18%.
In the adult world of quantifiable reality, Madoff wasn't actually buying any shares at all. He was merely selling his victims 'infinite shares' in what could only be their own finite cash. The glossy 'offering memorandums' of 'Fairfield Sentry Ltd. ', which fooled almost everyone (including some of the world's most-respected financial journalists), were complex pseudo-economic hocus-pocus.
David Brear
We are now witnessing the rather unedifying spectacle of young Trivedi regurgitating his thought-stopping 'Amway' mantra on your Blog. Unfortunately, the systematic reaction of all deeply-deluded cult adherents (when challenged over the authenticity of their beliefs) is to retreat behind a wall of their group's complex, pseudo-scientific hocus-pocus, and then steadfastly pretend that anyone who can't understand it, must be stupid.
Interestingly, Bernie Madoff used essentially the same tactic when challenged by free-thinking journalists.
At the beginning of 2001, Madoff had acquired absolute control over 6 - 7 billions dollars. Most financial journalists believed Madoff to be managing these capital assets on behalf of wealthy individuals. Indeed, this part of his operation was (then) officially listed as 'being amongst the world's three largest hedge funds.'
According to a May 2001 report in MAR Hedge (a respected trade publication). 'What's more, these private accounts, have produced compound average annual returns of 15% for more than a decade. Remarkably, some of the larger, billion-dollar Madoff-run funds have never had a down year.' When, in 2001, Madoff was asked by a free-thinking Journalist exactly how he accomplished these 'remarkable' returns, he smiled knowingly and said:
'It's a proprietary strategy. I can't go into it in great detail.'
Jeffrey Tucker, partner and co-founder of Fairfield Greenwich (a New York City-based firm that marketed Madoff's funds) was equally evasive:
'It's a private fund. And so our inclination has been not to discuss its returns.'
One of Fairfield Greenwich's most sought-after funds was 'Fairfield Sentry Ltd.' (managed by Bernie Madoff). 'Fairfield Sentry' declared assets of '$3.3 billion.' One of its glossy 'offering memorandums' described Madoff's strategy this way:
'Typically, a position will consist of the ownership of 30-35 S&P 100 stocks, most correlated to that index, the sale of out-of-the-money calls on the index and the purchase of out-of-the-money puts on the index. The sale of the calls is designed to increase the rate of return, while allowing upward movement of the stock portfolio to the strike price of the calls. The puts, funded in large part by the sale of the calls, limit the portfolio's downside.'To options traders, that is what is known as the 'split-strike conversion' strategy. In simple terms, it means Madoff claimed to be investing primarily in the largest stocks on the S&P 100 index (like General Electric , Intel and Coca-Cola). At the same time, he claimed to be buying and selling options against those stocks. For example, Madoff would claim to have purchased shares of GE and to have sold a call option on a comparable number of shares (i.e. an option to buy the shares at a fixed price at a future date). At the same time, Madoff would claim to have bought a put option on the stock, which gave him the right to sell shares at a fixed price at a future date. Madoff's 'remarkable' strategy, in effect, claimed to build a protective boundary around a stock, limiting its upside while at the same time protecting against a sharp decline in the share price. This so-called 'market-neutral strategy' was supposed to produce positive returns no matter which way the market went. In 2001, using this 'split-strike conversion strategy', 'Fairfield Sentry Ltd' claimed only to have had four down months since its creation in 1989. In 1990, 'Fairfield Sentry' claimed to be up 27%. In the following decade, the fund was supposed to have returned no less than 11% in any year, and sometimes as high as 18%.
In the adult world of quantifiable reality, Madoff wasn't actually buying any shares at all. He was merely selling his victims 'infinite shares' in what could only be their own finite cash. The glossy 'offering memorandums' of 'Fairfield Sentry Ltd. ', which fooled almost everyone (including some of the world's most-respected financial journalists), were complex pseudo-economic hocus-pocus.
David Brear
1 comment:
Excuse me brear, i am sorry to interrupt you, currently we (i and shyam) are discussing on business plan, shyam i am waiting for your answer.
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