Storm Financial Group

[shibby]

A simple question…if you had such good spreadsheets, then why didn’t they tell you long before the portfolio was sold down that you were in trouble and to bail out? Or, if they did tell you that, why didn’t you?

As you know, the market suffered gradual, steady falls during 2008 until September when the crap really hit the fan. However, for many, they were actually in negative equity long before September, due to this responsible investment strategy known as double gearing. Why didn’t you bail out earlier? Or did you get out??

I am not going around and around in circles any more going over the same thing time and time again. I will never say I am to blame and you will keep saying I am.
This is the last question I will answer for you.

Of course I asked to be sold up and they kept lying to me and saying that I didn't know what I was talking about, July came and then I was convinced I was right and they didn't know what they were talking about.
They reverted approx 1/3 to cash in July from then on it was a nightmare where they refused to cash me up, I would say I am in buffer, no your not, I am in margin call no your not, a good excuse was there is a lag with Macquaries compter data they just stalled and stalled.
There is a lot more to that which is a bit of a waste of time really even talking about as the terror and hysteria I felt comes racing back never want to feel like that ever, ever again. I think my story is a pretty common one there were a lot who tried to get out I am not Robinson Crusoe. In fact I have a good data base of all those who mentioned that they also tried. Trowel the site its full of information
Good night I am tired I am not even sure if I have made sense will probably read it in the morning and gasp.
I cant say that I have enjoyed the experience of conversing with you as we really dont converse you have your agenda and I have mine and never the twain shall meet.
Its such a shame that your obviously so angry about the blame issue are you worried about my soul if I dont admit to being wrong?

 

[SJG1974]

I am not going around and around in circles any more going over the same thing time and time again. I will never say I am to blame and you will keep saying I am.
This is the last question I will answer for you.

Of course I asked to be sold up and they kept lying to me and saying that I didn't know what I was talking about, July came and then I was convinced I was right and they didn't know what they were talking about.
They reverted approx 1/3 to cash in July from then on it was a nightmare where they refused to cash me up, I would say I am in buffer, no your not, I am in margin call no your not, a good excuse was there is a lag with Macquaries compter data they just stalled and stalled.
There is a lot more to that which is a bit of a waste of time really even talking about as the terror and hysteria I felt comes racing back never want to feel like that ever, ever again. I think my story is a pretty common one there were a lot who tried to get out I am not Robinson Crusoe. In fact I have a good data base of all those who mentioned that they also tried. Trowel the site its full of information
Good night I am tired I am not even sure if I have made sense will probably read it in the morning and gasp.
I cant say that I have enjoyed the experience of conversing with you as we really dont converse you have your agenda and I have mine and never the twain shall meet.
Its such a shame that your obviously so angry about the blame issue are you worried about my soul if I dont admit to being wrong?

I appreciate the answer. Certainly in a situation as you have described, I can understand the frustration and the bad memories. I would guess that in the situation you describe, your Storm adviser would have a case to answer if he prevented you from doing what you wanted.

As for the blame issue, it is a common theme throughout the forum.

Almost every Storm victim on this forum has played the blame game..blaming the banks, Cassimatis, their adviser, ASIC, the FPA, the government, whoever. It is a common theme throughout...lets point out how the banks screwed us. It has been a completely one sided argument from these people....it is all someone else's fault.

We have had posters try to turn the whole focus of the forum onto the banks and the leglities, because it suits them. Well, this is a forum, and the issues concerning this disaster are much broader than what the banks did or didn't do. Posters can talk about whatever they like as far as I am concerned. And I will say my bit, and if you don't agree, thats fine. I am not here to win a popularity contest.

But remember, at the end of the day, if Storm didn't have clients who were sucked into taking and paying for their advice, this forum wouldn't even exist.

And if, as some posters have claimed, they want to use their experience as a lesson or warning for others, focusing on what the banks did won't help the next wide eyed investor who falls for a slick sales pitch by a Greek in a sportsjacket. Because the client is the one in control, just as you were when you walked into the Storm Office the first time. What you and others did and didn't do is a far more valuable lesson to learn on how to avoid another Storm in my opinion, because you had the power to say yes or no.

Anyway, good night, I hope your dog feels better by the morning.

 

[Solly]

"Sting operation reveals poor quality of planning

A SWEEP by the corporate regulator has uncovered ''disappointingly high'' levels of poor quality advice provided by financial planners."

More by Ruth Williams @ http://www.brisbanetimes.com.au/bus...of-planning-20120124-1qfnp.html#ixzz1kPXrhus0

 

[doobsy]

Notes from the darkside:

Thought I would bring in some insight. My firm is lucky enough to have a solid but managable client base, most of which have been with us for many years. We are low risk.

Fin Planning is a profession where you really can't win. We are dealing with people's money. That is a huge responsibility. But there are a number of factors that we fight with on a daily basis:

1. The massive undereducation of most people when it comes to money. For example most people think super is shares. They don't understand it is simply a tax structure where you invest in whatever asset class you prefer.

2. A followon from this apathy is a low level of willingness to actually provide truthful answers about risk tolerance, experience, other assets etc. Part of this may be the skeptic in people, part of it may also be not wanting to look silly. All of it makes it harder to give good advice.

3. Laziness. People don't want to think about it. I ask 2 simple questions like - when would you like to retire and how much a week would you like to retire on? I can't get an answer. How do I formulate a plan without that? Too busy with life and the biggest loser to sit down and think about things before coming in to an adviser.

4. If I tell people they can retire at 65 on $40,000 per annum and they really wanted to know they could retire at 60 on $60,000 then they are going to leave and go find someone that tells them that is achievable. My figures are realistic but there is automatically a conflict isn't there. Do I tell the client what they want to hear and get a client or do I tell them the truth and end up with no client. How do I reconcile my business interests with my client interests.

5. Greed - human nature is to get as much as possible as quickly as possible. Call it whatever you want but our nature is we want to survive and prosper. There is much talk on this topic on the forum. Again if I tell a client they can live on $40K pa and still have all their money to give to their kids or spend $60K pa but have no capital left by the time they reach 90 (if they do) and another adviser tells them they can have the $60K pa and still have the money at the end - which strategy will they take? Will they consider risk at all or because it ticks all the boxes will they just adopt it?

6. Borrowing - Australians still believe that banks are their friends and that debt is not a problem. Right or wrong we love bricks and mortar and believe it is safe. As the US, Spain etc are finding out, property is just another asset class that can have it's ups and downs. If a bank can see property prices heading south and I walk in wanting to borrow money to buy a property - is it their responsibility to tell me to come back in 6 months becuase prices will be cheaper and I won't have to borrow as much? Their first responsibility is to their shareholders to make money. #1. To not do so could get them sent to jail. Consumer protection is not their responsibility. The Govt has set rules on this and if they play by the rules then I don't see the drama. If they break the rules then watchout.

A second part of this is borrowing for other purposes. How many people borrowed to invest in Gold Coast units or worse listened to a spruiker and pulled their super out to buy 2 units, or to start up a small restaurant business in Brisbane only to see GC units fall in value by 25% or Brisbane get flooded and have lost their capital. Where is their bailout?

Oh and if you want a laugh then google sharemarket projections for 2007, 2008, 2009 etc etc and see how badly most of the "experts" and certainly the bank "economists" have got it over the years. If they are the ones advising the banks then of course they will lend money willy nilly - it is always a bull market!!!!!!!

7. Intangibles. We sell promises. Whether it be a retirement goal or an insurance package or a saving plan you hand over fees and get........nothing. Nothing you can take away and touch. No planner controls markets and so the dumb ones try to use historical returns to tell clients what they can expect. My words - you can expect what you put in + or - the growth along the way. I don't know how long they will leave it in for, where markets will be that particular month. I do know that clients who say they will leave monies in for 10 years really mean 3-5. Then they want / need it for something so important that they couldn't have budgeted for it or told me about it when we did the plan.

Anyway - that is some feedback from the darkside.

Shibby - thanks for offering info about what occurred in 2008. Again it re-inforces Storm screwing people to protect their interests. God I hope thereare a few clients who will go EC just as hard as they seem to be willing to go the banks.

 

[SJG1974]

Good stuff doobsy, a good read.

Whats the old saying....when people's investments go up in value they pat themselves on the back. When they go down, they blame their adviser.

A tough job no doubt, not helped by the publicity of large failures like Storm which, as this forum has shown, tar the whole industry with the same brush.

 

[bunyip]

Good stuff doobsy, a good read.

Whats the old saying....when people's investments go up in value they pat themselves on the back.
When they go down, they blame their adviser.

And the banks and the government and ASIC and the FPA and anyone else they can think of.

 

[shibby]

Notes from the darkside:


Shibby - thanks for offering info about what occurred in 2008. Again it re-inforces Storm screwing people to protect their interests. God I hope thereare a few clients who will go EC just as hard as they seem to be willing to go the banks.

Doobsy Part1- I though your post was really interesting and I have a million questions to ask so I need to get my brain into gear as I want to set the questions in the context of the Brisbane Times article.

I thank you Solly for that link.

Doobsy Part 2 - Well litigation takes money and we don’t have any. We therefore have two choices
We wait till we get out money from the banks, then we will have money for legal expenses, also the Storm advisors will have money (I am assuming if we win then they win) and then they are really worth suing wouldn’t you say?

But I have a slight problem with that idea and that is if we get our money back what exactly are we suing the advisors for?

We are obviously pre the new legislated fiduciary duty. Pain and suffering? Would that get up? I don’t think so - though we could of course be trail blazers and set some sort of precedent related to financial disasters. I don’t think the words pain & suffering do the experience of the last 3 years justice.
Or we wait for ASIC – Maybe the CBA could fund ASIC to get really serious about hanging the advisors, no more of this you can’t practice for 3 years c**p?
Has the CBA funding ASIC been suggested before? Or did I just think of it?

I suppose you are choking by now SJC1974? You are obviously a financial advisor.

 

[shibby]

I have taken this from the Brisbane Times Article

A SWEEP by the corporate regulator has uncovered ''disappointingly high'' levels of poor quality advice provided by financial planners.
As a war of words continued yesterday over the federal government's planned reforms to financial advice, the Australian Securities and Investments Commission released the first results of a ''shadow shop surveillance'' of advisers undertaken last year.
ASIC, which used real consumers seeking retirement advice to carry out the sweep, revealed that of the 64 advice plans provided, more than a third were rated as poor, 61 per cent as adequate and just 3 per cent - two of the 64 plans - were classed as good.
The ASIC commissioner, Peter Kell, said there was a ''consistent failure'' by advisers to talk to clients about what their retirement savings could realistically fund, with many plans containing ''woefully inadequate projections'' and ''poor or unrealistic'' technical assumptions.
There was too much generic advice, Mr Kell said, and conflicts of interest remained a problem.
ASIC announced the results at a parliamentary committee hearing reviewing the government's proposed Future of Financial Advice laws.
The laws, sparked by investment collapses such as Storm Financial and Westpoint, will require financial advisers to act in their clients' best interests, ban conflicted payments such as commissions, and strengthen the regulator's power to refuse or cancel financial services licences.


Doobsy this isnt the post that I specifically want you to answer from your last post this is just a general post.

I would really like the Financial Advisors out there to comment on this article if possible.

Firstly do you think this article is a true reflection on the industry? As one cant believe every thing one reads in the press.

Do you think that some of the inappropriate advice could be related to greed?

What would you personally like done to clean up the industry?

Do you think the number "64 financial plans" is a large enough statistical data base to get a true picture of the industry?
That question goes both ways of course

 

[Solly]

"ASIC Criticises Poor Quality of Advice Given by Australian Financial Planners

The Australian Securities & Investments Commission (ASIC) has criticised the poor quality of advice that Australian financial planners have given to clients."

More from Vittorio Hernandez @ International Business Times

 

[Solly]

"Lawyers lash out on ASIC in Storm saga

THE Australian Securities and Investments Commission is again under fire over its handling of the Storm Financial collapse, with lawyers claiming it is in bed with the Commonwealth Bank."

More by Tony Raggatt @ townsvillebulletin.com.au

 

[Julia]

Judd, could you explain the 'psychological stress', or even more the 'physical threat'
incurred in reading an explanation of how to access the share price of a company?

Such information being offered in response to someone expressing confusion because they did not know whether to believe a claim that bank shares had done very well.

Judd, I'm still hoping for a response from you on the above. Please?

What is your definition of wanting more than you need? I don't need to own my home, I could be content to rent - is striving for home ownership being greedy? I don't need to feed my family nutritious food, we could subsist on McDonalds for less than my average weekly grocery bill - am I being greedy in wanting a good diet? My kids don't need to go to a good school, but I want to give them the best chance in life that I can - am I being greedy here? I've never been outside Australia, but would love to broaden my horizons and gain an insight into how other nationalities live - am I being greedy to aspire to overseas travel one day? I don't need to put myself in a position to help my kids fund their first homes, or leave them a little nestegg, but I'd like to - is this being greedy? Who are you to tell me I can't have aspirations and dreams anyway? If wanting more than you need is the definition of greed, I guess you need to clarify exactly what constitutes a need vs a want. A necessity for you might be a luxury for me, or vice versa.

What you want out of life is a matter for no one but yourself. The question is far more "what level of risk are you going to engage in to achieve these aspirations"?

Some people will prefer to live in a two bedroom apartment in a mediocre suburb on which they owe no one a cent. Others will so aspire to the supa dupa home in a salubrious neighbourhood that they will risk their existing level of assets in the pursuit of such targets.

I don't care if someone aspires to be the richest person in the world. It will never make any difference to the preference of others to eschew such risk in favour of ensuring the security of what they currently own.

 

[shibby]

from my Brisbane Times Article


Do you think the number "64 financial plans" is a large enough statistical data base to get a true picture of the industry?
That question goes both ways of course

That line should have read is a large enough statistal sample not data base
sorry
I dont know how to edit

 

[SJG1974]

I suppose you are choking by now SJC1974? You are obviously a financial advisor.

Good to hear from you again shibby, the dog is obviously better? You didn't stay away for long did you??

You are right, I am choking...I reread your post about Storm victims being sensible by double gearing into a strategy they don't understand! But choking over this? Why would that affect me? Don't flatter yourself.

And no I am not a financial adviser. I have worked with several advisers over the journey, a couple who were so so, and the current one who I believe has been very good and has become a friend. So I know a bit about what they can provide, and some of the obstacles they can overcome. I also have a keen interest in investor psychology, of which this forum has been a fascinating study, I can tell you.

Mainly, my advisers have concentrated on tax planning, asset structuring and helped me secure good insurance cover. And I have been happy to pay their fees for the service. My idea of financial advice is this sort of stuff, not handing my money over to them and expecting them to make me rich- thats not financial advice in my book.

I do my own investing, never borrowed to invest other than in my home. Too risky for my liking, but hey, thats just me. I lost quite a bit of money in the GFC and made some bad investment decisions, but learned from my mistakes and picked myself up and went again. And I am sure I will make investment mistakes again in the future....and like I have before, I will accept responsibility for the decisions I make. As I said previously, apparently an old fashioned concept in this day and age of blame.

And no, I wasn't recommended to gear to the gills to save some tax, nor did I go with strategies I didn't understand. That would be crazy wouldn't it...who on earth would be silly enough to do that?

So no, I am not an adviser. But I appreciate you thinking of me.

 

[bunyip]

This has been covered many times on this thread already. Anyone with even a cursory knowledge of Storm would know that there were three or four index funds which simply tracked the performance of the market - therefore there were no promises of exceptional returns.

Storm duped their clients by passing their strategy off as low risk and conservative because it invested in Index funds that aimed only to duplicate the performance of the overall market.
But you didn’t have to scratch far below the surface to see how this masked the true picture.

Sink 100 grand of your own money into an index fund. No borrowed money involved. A 10% rise in the market equates to a 10% return on your 100 grand, while a 10% fall equates to a 10% loss on your 100 grand.
How about if you use Storm’s strategy by mortgaging your home and borrowing aggressively to crank your 100 grand investment up to 400 grand. Now a 10% rise in the market equates to a 40% return on your 100 grand. A 10% fall on the market equates to a 40% loss on your 100 grand.
A 25% market rise equates to a 100% gain on your base capital of 100 grand, whereas a 25% market fall means a 100% loss of your 100 grand of base capital.
And the nature of markets is that 25% falls happen much quicker than 25% rises. How about if you cop a 50% fall in the market – you do the sums. And there’s been a number of market falls of 50% over the years, so it’d be naïve to think ‘it can’t happen again’.

How’s that ‘conservative and low risk’ Storm strategy looking now?
They used leverage to massively increase gains, but the downside was that it massively increased losses when the market turned bearish. Nothing safe or conservative about that.

The myth of the ‘conservative’ Storm strategy is promoted on the SICAG website in an article on margin lending written by former Storm adviser Luke Vogel.
Here’s an extract from that article.....

Essentially, the Storm model promised ‘average market returns’...nothing more, nothing less. Some media reports claimed that Storm clients were greedy because they were choosing high-risk high-return investment and that they got what they deserved. Clearly, an index fund cannot outperform the market!

While Vogel doesn’t say anything dishonest here, he masks the true picture by neglecting to mention that Storm’s model was based on heavy leverage, thereby converting a conservative strategy into a high risk strategy.

 

[Igetit]

Good to hear from you again shibby, the dog is obviously better? You didn't stay away for long did you??

You are right, I am choking...I reread your post about Storm victims being sensible by double gearing into a strategy they don't understand! But choking over this? Why would that affect me? Don't flatter yourself.

And no I am not a financial adviser. I have worked with several advisers over the journey, a couple who were so so, and the current one who I believe has been very good and has become a friend. So I know a bit about what they can provide, and some of the obstacles they can overcome. I also have a keen interest in investor psychology, of which this forum has been a fascinating study, I can tell you.

Mainly, my advisers have concentrated on tax planning, asset structuring and helped me secure good insurance cover. And I have been happy to pay their fees for the service. My idea of financial advice is this sort of stuff, not handing my money over to them and expecting them to make me rich- thats not financial advice in my book.

I do my own investing, never borrowed to invest other than in my home. Too risky for my liking, but hey, thats just me. I lost quite a bit of money in the GFC and made some bad investment decisions, but learned from my mistakes and picked myself up and went again. And I am sure I will make investment mistakes again in the future....and like I have before, I will accept responsibility for the decisions I make. As I said previously, apparently an old fashioned concept in this day and age of blame.

And no, I wasn't recommended to gear to the gills to save some tax, nor did I go with strategies I didn't understand. That would be crazy wouldn't it...who on earth would be silly enough to do that?

So no, I am not an adviser. But I appreciate you thinking of me.

Home from a little skiing in Austria,

Thought I'd check in and see what you guys are getting up to.

Now SJG 1974 - I appreciate your common sense approach to investing: "not gearing up to the gills or investing in strategies you didn't understand." Wise, very wise.

So with the: "bad investment decisions I made", were they a result of:

a. your greed - chasing big returns, thinking you understood what you were doing but didn't really
b. stupidity - for in spite of "not investing in strategies you didn't understand", turns out in hindsight - you did exactly that. Apparently, really stupid, as you appear confident that: "I will make bad investment decisions again".

Note to self: disregard anything SJG 1974 has to say. Appears to have a learning deficit.

c. laziness
d. naivety
e. you tell us what it was....Maybe just bad luck.

But they were your "bad decisions" - right - and you lost out. You, Mr Conservative and Careful. Enlighten us. Why? What happened? If you have that funny feeling of being painted into a corner - well, dear friend - now's your chance to wriggle on out. How could someone so cautious, careful and thorough make a bad decision? I can't believe it! What mistake(s) did you make. The pensioners involved in the Storm debacle would like to learn from your experiences. I am sure you can see lots and lots of parallels between what they were exposed to and your own experiences with investment. One in the same right, SJG 1974?

Nice that you take responsibility for your errors though. Noble.

Can't wait for this.

 

[shibby]

Storm duped their clients by passing their strategy off as low risk and conservative because it invested in Index funds that aimed only to duplicate the performance of the overall market.
But you didn’t have to scratch far below the surface to see how this masked the true picture.

Sink 100 grand of your own money into an index fund. No borrowed money involved. A 10% rise in the market equates to a 10% return on your 100 grand, while a 10% fall equates to a 10% loss on your 100 grand.
How about if you use Storm’s strategy by mortgaging your home and borrowing aggressively to crank your 100 grand investment up to 400 grand. Now a 10% rise in the market equates to a 40% return on your 100 grand. A 10% fall on the market equates to a 40% loss on your 100 grand.
A 25% market rise equates to a 100% gain on your base capital of 100 grand, whereas a 25% market fall means a 100% loss of your 100 grand of base capital.
And the nature of markets is that 25% falls happen much quicker than 25% rises. How about if you cop a 50% fall in the market – you do the sums. And there’s been a number of market falls of 50% over the years, so it’d be naïve to think ‘it can’t happen again’.

How’s that ‘conservative and low risk’ Storm strategy looking now?
They used leverage to massively increase gains, but the downside was that it massively increased losses when the market turned bearish. Nothing safe or conservative about that.

The myth of the ‘conservative’ Storm strategy is promoted on the SICAG website in an article on margin lending written by former Storm adviser Luke Vogel.
Here’s an extract from that article.....

Essentially, the Storm model promised ‘average market returns’...nothing more, nothing less. Some media reports claimed that Storm clients were greedy because they were choosing high-risk high-return investment and that they got what they deserved. Clearly, an index fund cannot outperform the market!

While Vogel doesn’t say anything dishonest here, he masks the true picture by neglecting to mention that Storm’s model was based on heavy leverage, thereby converting a conservative strategy into a high risk strategy.

Have you had a lobotomy Bunyip for the first time ever there are just facts.

Just for this exercise we leave out the "arrangements with the banks over funding".

Lets also leave out the "arrangements over LVR %"

So now that has been settled what would the responsibility of the Financial Advisor be under these circumstances?

To revert you to cash when your LVR has reached 98.7% or in some cases 126% 145%.

 

[SJG1974]

Home from a little skiing in Austria, .

Good to see the fees the Storm victims are paying you to try and recover something from this mess enables you to get away for a while. Good for you idontgetit. Good for you.

So with the: "bad investment decisions I made", were they a result of:
a. your greed - chasing big returns, thinking you understood what you were doing but didn't really
b. stupidity - for in spite of "not investing in strategies you didn't understand", turns out in hindsight - you did exactly that. Apparently, really stupid, as you appear confident that: "I will make bad investment decisions again”. .

I guess with a GFC happening idontgetit, (you do know there was one don’t you….it wasn’t just storm victims duded by the banks that suffered through this) I was bound to lose some money by investing in shares, unless I had a crystal ball or kept all my money in the bank. Markets do go up and down you know?

My mistake was holding onto some investments for too long while the market kept slipping. I probably should have got out earlier. Actually in hindsight I should have got out in December 2007. But I didn’t. Thankfully I liquidated most holdings in July 2008, so I only suffered probably half the loss that the sharemarket did. My fault, no one elses. I understood what I was doing, and I understood the risks in share investing. And I chose to accept the risks. I took the risk, I copped the consequences when it went wrong.

Perhaps I was greedy, probably was- I held on hoping to regain some of my value. I have been greedy before. I have never said greed is a crime, I just think you should accept the consequences if your greed produces undesired results. Again, old fashioned thinking I guess.

But I made the decision, no one else made it for me. Rather than looking for someone to blame, I reflected on what I did and what I would have done differently. Hopefully, next time I will make a better decision…I guess we will see. But I am not for a minute thinking that I won’t make the odd bad investment decision in the future. It would be stupid to think otherwise. Even Warren Buffet has bought the odd dud in his life.

I guess if you consider people who lose money stupid, then I was, and I will continue to be because as long as I have share investments, I can be sure that from time to time I will lose. But I am not stupid enough to risk everything in an extremely high risk strategy, Not take the time to understand what it is my life savings are being invested in, pay a small fortune for the privilege, and have a third party manage the whole lot for me. That, dear friend, is stupidity.

Note to self: disregard anything SJG 1974 has to say. Appears to have a learning deficit. .

And good to see you disregarding your own advice in disregarding what I say idontgetit…you have obviously gone back through my posts to pose the questions you have. Note to self…don’t take any advice from Idontgetit, because he doesn’t even take his own advice. Is not taking your own advice considered a learning deficit? Perhaps that is a better definition of stupidity?

If you have that funny feeling of being painted into a corner - well, dear friend - now's your chance to wriggle on out. .

I do have a funny feeling, but that’s probably due to the curry I had for dinner last night rather than being painted into a corner. I am happy to share what I did. (See what I did there? I said what I did, not what they did to me! A subtle but important difference I reckon. I am sure you will disagree though old friend.). But no need the wriggle, I have no issue admitting to mistakes I have made.

The pensioners involved in the Storm debacle would like to learn from your experiences. I am sure you can see lots and lots of parallels between what they were exposed to and your own experiences with investment. One in the same right, SJG 1974? .

Given what some Storm victims have shown on this forum, they have no interest in learning anything. All they are interested is in finding someone to blame for the decisions they made.

As for parallels, sure there are some parallels idontgetit…like Storm investors, I had investments in the sharemarket. That’s probably where the similarities end actually. The basic differences I can see are:

- I diversified my portfolio between asset classes, not just between different shares
- I understood the risks involved in what I was doing before I did it, not after I had suffered losses. I took the time to bone up on what I was doing (crazy hey?)
- I didn’t gear at all (let alone twice), therefore I couldn’t lose more than I invested. And given the sharemarket only lost 50% of its value, I was never going to lose the whole lot.
- I didn’t place ALL of my life savings in someone elses hands…I invested it myself
- When I lost, I took responsibility for the decisions I made
- I haven’t blamed anyone else for my woes. Well, that’s not true, I reckon the CIA and the Queen of England have got off lightly on this one. They were involved in the high level corruption up to their eyeballs.

So there you go. Like every investor in the history of investing, I have made some bad decisions. No shame in that. I knew the risks, decided the risk was worth the potential rewards, and on this occasion lost. That’s life…that’s investing. I am not blaming anyone and everyone else for my losses…because the decisions I made were mine and mine alone. Thankfully due to a relatively cautious approach, the investment losses didn’t wipe me out…far from it, and I live to fight another day.

No such thing as a risk free investment, despite what a Greek in a sportsjacket might tell you.

Can't wait for this.

I hope it was worth the wait, but given you noted to yourself you will disregard everything I say, you probably won’t bother reading it anyway! Either that, or you will ignore your own advice or gut feel. Which will it be???

 

[Solly]

Home from a little skiing in Austria,

Thought I'd check in and see what you guys are getting up to.

Now SJG 1974 - I appreciate your common sense approach to investing: "not gearing up to the gills or investing in strategies you didn't understand." Wise, very wise.

So with the: "bad investment decisions I made", were they a result of:

a. your greed - chasing big returns, thinking you understood what you were doing but didn't really
b. stupidity - for in spite of "not investing in strategies you didn't understand", turns out in hindsight - you did exactly that. Apparently, really stupid, as you appear confident that: "I will make bad investment decisions again".

Note to self: disregard anything SJG 1974 has to say. Appears to have a learning deficit.

c. laziness
d. naivety
e. you tell us what it was....Maybe just bad luck.

But they were your "bad decisions" - right - and you lost out. You, Mr Conservative and Careful. Enlighten us. Why? What happened? If you have that funny feeling of being painted into a corner - well, dear friend - now's your chance to wriggle on out. How could someone so cautious, careful and thorough make a bad decision? I can't believe it! What mistake(s) did you make. The pensioners involved in the Storm debacle would like to learn from your experiences. I am sure you can see lots and lots of parallels between what they were exposed to and your own experiences with investment. One in the same right, SJG 1974?

Nice that you take responsibility for your errors though. Noble.

Can't wait for this.

Igetit, good to see that you have returned unscathed from the Alps to this forum. That reminds I must again try my luck again at Mühlbach am Hochkönig, although last time while en route I must say I did end up a litte worse for wear after a stay at the Hotel Stieglbräu. But that is another story and probably one that GG or John Birmingham would fully understand.

I was quite amazed that SJG 1974 has admitted to making past bad investment decisions and is likely to make them again in the future. No doubt SJG 1974 will take full responsibility for those decisions and will never attempt to seek a remedy or compensation from any other parties that had input or influence in that flawed strategy. Each to their own, as they say. I'm making a guess that SJG is around 38, I wonder what SJG's attitude would be like if he/she was around 60 or 70 when investment 'mistakes' were made.

I totally agree with SJG's statement of not handing money over to FAs and expecting them to make you rich. I don't know of anybody who is 'rich' due solely to the advice of an adviser. I suppose some have worked out what industry I am in and certain people in this game take home multimillion dollar pay packets, others struggle to survive. The real wealth and high value lifestyle I see being made is through the spoils of the corporate world, not through the efforts of your local financial adviser who, drives a Mazda3, works 6 days/nights a week and who is themselves servicing a 30 year mortgage. I suppose my view on the financial advisory arena is that it is more like a savings bank but with slightly higher returns but those who choose to use the services of this industry should be afforded the basic protections, safeguards and harm minimisation that our society offers.

One final thing about the spoils and riches of the corporate world, I have an associate who has a favourite saying which I'll share now.

"When it comes to making bucket loads, not everybody can have the financial acumen, marketing momentum, business wisdom and stage presence of a 'Kochie'."


S

 

[SJG1974]

I was quite amazed that SJG 1974 has admitted to making past bad investment decisions and is likely to make them again in the future. No doubt SJG 1974 will take full responsibility for those decisions and will never attempt to seek a remedy or compensation from any other parties that had input or influence in that flawed strategy. Each to their own, as they say. I'm making a guess that SJG is around 38, I wonder what SJG's attitude would be like if he/she was around 60 or 70 when investment 'mistakes' were made.

I am not sure why you would be amazed Solly. I have never professed to be some sort of investment guru....far from it. As I said, I am sure everyone has made bad investment decisons at one time or another, from Peter Lynch, to Warren Buffet, to SJG1974, to even Solly (perhaps not, judging by your amazement). What I have done though is taken an active interest in how my money is invested and developed an understanding of the risks involved. My philosophy is if you can't be bothered giving your own investments the attention they deserve, then don't expect someone else to do it for you, no matter what promises they may make to you.

There are 'mistakes' and there are 'mistakes'. Plonking $5,000 that you can afford to lose on a specualtive stock that goes down the tubes I would consider a mistake....but it won't wipe me out. Riding a stock up past my exit point is a mistake, but it won't wipe me out. I have been guilty of these things amongst others. Borrowing against my home, gearing again, putting it all in shares and not having even a basic understanding of the risks involved I would also consider a mistake, but of a much higher magnitude. Certainly, I have never made a mistake like this. Some would consider me lucky that I haven't made such a mistake. I would call it being prudent.

I just choose to take responsibility for the investment choices I make. Perhaps that is amazing in this day and age....it sure seems to be. You mention full responsibility for decisions...well most Storm victims we have seen around these parts haven't even taken partial responsibility. And as i have mentioned time and time again, if laws were broken then I would hope and expect that the wrongdoers will pay. I have no issue with that, despite some people for whatever reason thinking otherwise.

But, was it all the bank's and Storm's fault that some people lost the roofs over their heads, while other people who visited Storm walked away unscathed (by Storm, that is)?

Like you, I am all for consumer protection where it is necessary...but it is impossible to protect people from themselves, and from making bad decisions. I can guarantee there will continue to be scams around for as long as I am alive, and people will still be lured by the promise of a quick buck and get burned.

Hopefully I will have enough common sense to say no in the future when someone tells me to borrow against my home, gear up again and plonk it all in shares. Hopefully I will have the common sense to do some independent thinking and research rather than believe the words of the salesman who is selling me the dream. Hopefully I will understand the risks, and if I don't, choose not to proceed. Hopefully I will continue to diversify.

Even by doing this, I am sure I will make mistakes. Thats life. Hopefully, though, if I follow the above, those mistakes won't completely wipe me out and result.

There are no guarantees in life though are there...I guess time will tell.

 

[Solly]

I am not sure why you would be amazed Solly. I have never professed to be some sort of investment guru....far from it. As I said, I am sure everyone has made bad investment decisons at one time or another, from Peter Lynch, to Warren Buffet, to SJG1974, to even Solly (perhaps not, judging by your amazement). What I have done though is taken an active interest in how my money is invested and developed an understanding of the risks involved. My philosophy is if you can't be bothered giving your own investments the attention they deserve, then don't expect someone else to do it for you, no matter what promises they may make to you.

There are 'mistakes' and there are 'mistakes'. Plonking $5,000 that you can afford to lose on a specualtive stock that goes down the tubes I would consider a mistake....but it won't wipe me out. Riding a stock up past my exit point is a mistake, but it won't wipe me out. I have been guilty of these things amongst others. Borrowing against my home, gearing again, putting it all in shares and not having even a basic understanding of the risks involved I would also consider a mistake, but of a much higher magnitude. Certainly, I have never made a mistake like this. Some would consider me lucky that I haven't made such a mistake. I would call it being prudent.

.....................................

Hopefully I will have enough common sense to say no in the future when someone tells me to borrow against my home, gear up again and plonk it all in shares. Hopefully I will have the common sense to do some independent thinking and research rather than believe the words of the salesman who is selling me the dream. Hopefully I will understand the risks, and if I don't, choose not to proceed. Hopefully I will continue to diversify.

Even by doing this, I am sure I will make mistakes. Thats life. Hopefully, though, if I follow the above, those mistakes won't completely wipe me out and result.

There are no guarantees in life though are there...I guess time will tell.

SJG1974,

I applaud you on your balanced and sensible approach, it is refreshing to see this stated and I hope others are influenced by your views.

Just more about my comments about investment derailments which occur in later life. My observations of the Stormers is that some come from a generation who are very trusting. Where a handshake sealed a deal, a person's word was a binding contract and intent to defraud was a far away concept. Unfortunately it appears in this over regulated and compliance focused world some innate basic values get buried in the layers.

I acknowledge your view of blame and responsibility regarding the Stormers. I will be very interested to see where the regulatory authorities and the judiciary determine where the fault lies in this collapse.

S