Nofsdad
Joined: 06 Jul 2003
Posts: 8377
Location: Central CA
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Posted: Mon Aug 21, 2006 9:33 pm Post subject: This looks like it might be a good read
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Forbes
Never thought I'd be one of those "book booster" types but damned if this one doesn't look interesting.
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| Investigative journalist Gary Weiss has revealed the existence of organized crime on Wall Street, leading to many arrests and a colorful book, Born to Steal, about one mob-connected stockbroker. Now he's back with his second book, Wall Street Versus America ($25, Portfolio Hardcover, 2006), which sweeps across the investment world, uncovering the many ways that ordinary investors get fleeced. |
I'm especially interested in his take on hedge funds as evidenced by the following:
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| Hedge funds are "sometimes called investment vehicles, as in the Porsches their managers buy with your money," he writes. |
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| Mutual fund managers are "happy people with high self-esteem who draw fat salaries and bonuses for jobs that could literally be performed by nobody--an unmanaged index fund." |
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Forbes: Microcaps, as you rightly point out, suffer more from upward manipulation than sinister shorts. Is it futile to keep dumb investors from throwing money at bad stocks?
Weiss: Trying to keep investors from making bad investment decisions is a bit like trying to keep people from contracting venereal disease. You can cut down on the rate of infection, but that's about it. If folks want to engage in the investment equivalent of unprotected sex with HIV-positive prostitutes--despite all the warnings against doing so--they have only themselves to blame. |
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What do the backdating options scandals say about Silicon Valley's earlier idealistic embrace of options?
Actually, I think this backdating scandal shows a high degree of idealism on the part of the individuals involved. Clearly, these were people imbued with an all-American go-getter attitude, and a keen interest in finding new and better ways of outflanking the securities laws.
You know, I sometimes think that Wall Street is stuck in a 1960s-1970s counterculture mind-set--an attitude that the "establishment" needs to be ripped off at every opportunity. Abbie Hoffman wrote Steal This Book, but there are any number of execs who could write Steal This Company. |
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