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The Investor Product

February 14, 2013

Drama. Since the beginning of time and especially since the electronic and programmed trading that began in earnest in the late 80’s, the Investment Banks, of which there are only a few (perhaps a dozen worldwide that are “banks” and another hundred or so that are “affiliates” or “legal firms” in private placements, brokerage or underwriting) have worked hard to develop “The Investor Product” which is we who are not “Investment Banks” but like cotton in the fields to be harvested and spun, it is we who are the sources of raw money (our savings and pension plans but not only because it could also be our “credit rating”) that they would turn into capital to be invested by them.

Well, really, what should we expect? (The New York Times, February 10, 2013, Complex Investments Prove Risky as Savers Chase Bigger Payoff.)

Regulators across the country are confronting a wave of investor fraud that is saddling retirement savers with steep losses on complex products that until a few years ago were pitched only to the most sophisticated investors.ibid, The NYT.

The victims are among the millions of Americans whose mutual funds and stock portfolios plummeted in the wake of the financial crisis, and who started searching for ways to make better returns than those being offered by bank deposits and government bonds with minuscule interest rates. – ibid, The NYT.

Tens of thousands of them put money into speculative bets promoted by aggressive financial advisers. The investments include private loans to young companies like television production firms and shares in bundles of commercial real estate properties. Those alternative investments have now had time to go sour in big numbers, state and federal securities regulators say, and are making up a majority of complaints and prosecutions.ibid, The NYT.

Of course, we’re The RiskWerk Company and have said a whole lot more about that. Please see, for example, Numbers 20:12, August 2012 or Hedge Funds Bushwhacked By Volatility and Wallywood & The Baypatch, January 2013.

Postscript

We are The RiskWerk Company and care not a jot for mutual funds, hedge funds, “alternative investments”, the “risk/reward equation” and every other unprovable artifact of investment lore. We have just one product

The Perpetual Bond™
“Alpha-smart with 100% Capital Safety and 100% Liquidity”
Guaranteed
With No Fees and No Loads on Capital

For more information on RiskWerk, please follow the Tags or Categories attached to this Letter or simply enter Search for additional references to any term that we have used. Related data may be obtained from us for free in a machine readable format by request to RiskWerk@gmail.com.

Disclaimer

Investing in the bond and stock markets has become a highly regulated and litigious industry but despite that, there remains only one effective rule and that is caveat emptor or “buyer beware”. Nothing that we say should be construed by any person as advice or a recommendation to buy, sell, hold or avoid the common stock or bonds of any public company at any time for any purpose. That is the law and we fully support and respect that law and regulation in every jurisdiction without exception and without qualification to the best of our knowledge and ability. We can only tell you what we do and why we do it or have done it and we know nothing at all about the future or the future of stock prices of any company nor why they are what they are, now. The author retains all copyrights to his works in this blog and on this website. The Perpetual Bond®™ is a registered trademark and patented technology of The RiskWerk Company and RiskWerk Limited (“Company”) . The Canada Pension Bond®™ and The Medina Bond®™ are registered trademarks or trademarks of the Company as are the words and phrases “Alpha-smart”, “100% Capital Safety”, “100% Liquidity”, ”price of risk”, “risk price”, and the symbols “(B)”, “(N)” and N*.

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