Some may call Bernie Madoff, the man with no business ethical morality, as one of the cleverest crooks to ever grace wall street. Indeed, I have to admit that the way Madoff earned money from his investors was not easily done without the thorough understanding about the market and how to manipulate information to entice investors for capital. Especially, it really amazed me that this man was not just successfully maintain his Ponzi scheme for not just 4 or 5 years but for more than 15 years. He conned everyone brilliantly by promising the modest returns while pocketing their cash without investing it. Madoff took advantage of his naïve investors who have little knowledge about how the market actually works. So, would he be able to complete the same thing if his investors are people with strong financial and market knowledge?
To some extent, I consider that investors can be called as “stupid” if they literally do not know anything about how their investments runs and just simply put their trust in the promised return guaranteed by the one who take control of their money. Of course, rational person would have easily comments that they will never be that stupid. However, facing the pressure from daily tough challenge, the world is now full of people who desperate to believe in some ways that can make them earn the income, which is higher than the bank interest rate, by just giving the money to someone or some companies with big promises.
I have witnessed some people in my life that shared the same situation with the victims of Madoff’ fraud, losing all the possession and fortunes by putting their trust in the wrong place. Not many persons can have the adequate knowledge and experiences to deal with such clever criminal like Madoff. It would be better for all the investors to know that trust is a very rare thing in the financial world even with big companies or big name with showy reputation.
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