Investment Query

PPCG

Hi All,

I've not posted for a long time and was an active user of the Matched Betting forum (under a different account and I can't remember the login!!).

A couple of years ago I was told by a friend about a guy that we both knew who apparently "invested in the stock market", but was pretty good at it. Soundly like the typical guy in a pub story so I didn't pay much attention until a few months later when I actually sat down with the guy.

After he told me his story that he decided to give investing a go after a failed investment with a broker and that was over 10 years ago. Since then he has become increasing more proficient to the point that his last 5 years have not had a losing month.

I asked if he'd take some of my cash and since then I've added more. He has given me returns of well in excess of 10% each year and that's after a "fee" for him which is a decent percentage as well. He's got to the point now where he is guaranteeing at least 8% to the small amount of people he works with.

It wasn't until I read some of the posts on this forum and others saying this high percentage is very unusual and was wondering if anybody else out there had similar experiences or have I just hit it lucky and should put some more money it this?

And before the negative comments, it is not a scam as I've had returns in my bank account and the money is in my own account in my name in any case. It is not ponzi or pyramid scheme as he has very limited client numbers and can't withdraw my money at all. It's also not a share scam as he trades in decent sized companies (well I've heard of them at least).

Thanks

ColdIron

PPCG wrote: »

He's got to the point now where he is guaranteeing at least 8% to the small amount of people he works with.

What form does this guarantee take?

PPCG

ColdIron wrote: »

What form does this guarantee take?

Written contract. I know there's no such thing as a guarantee in this life but I think this is the closest to it. I might be wrong but I've looked at this from every angle and I can't see the catch

ColdIron

So not really a guarantee at all?

masonic

PPCG wrote: »

his last 5 years have not had a losing month.

Not a single month in which the portfolio is valued less than one month before? I find that extremely hard to believe.

have I just hit it lucky and should put some more money it this?

I suspect that you have hit it lucky, but luck can change, so I would still be cautious.

it is not a scam as I've had returns in my bank account and the money is in my own account in my name in any case.

Only time will tell whether or not it is a scam. The past 5 years have been very kind to almost all investors. In the future, returns of at least 8% every year cannot be guaranteed by anyone, unless they intend to take money is from somewhere other than the investments to cover any shortfalls.

puk999

PPCG wrote: »

should put some more money it this?

No.

Thanks

You're welcome.

PPCG

ColdIron wrote: »

So not really a guarantee at all?

Interesting point - what would you constitute as a guarantee?

PPCG

puk999 wrote: »

No.



You're welcome.

Informative - care to elaborate why?

PPCG

masonic wrote: »

Not a single month in which the portfolio is valued less than one month before? I find that extremely hard to believe.


I suspect that you have hit it lucky, but luck can change, so I would still be cautious.


Only time will tell whether or not it is a scam. The past 5 years have been very kind to almost all investors. In the future, returns of at least 8% every year cannot be guaranteed by anyone, unless they intend to take money is from somewhere other than the investments to cover any shortfalls.

Thanks for the feedback. Worth while and reasoned. I too shared you disbelief until I saw his online accounts. That's what sold it for me.

It's not physically possible for him to fund my account from anywhere else. Absolutely impossible as it's my trading account.

By comments so far I'd suggest nobody else has had experiences like this?

ColdIron

PPCG wrote: »

Interesting point - what would you constitute as a guarantee?

Well some sort of secured surety such as a fund of ring fenced cash, property or other collateral would be a start but the key thing here is what form does your guarantee in your written contract take? How exactly does the chap taking your money propose to re-reimburse you in the event of a losing month, year or years? Will he compensate you each month or is it a rolling month annualised?

Without some such commitment it constitutes little more than an aspiration

Has a solicitor had sight of the contract?

Your_Hero

So what happens when he doesn't meet the 8%? Does he rebate you from his own pocket?

Worse still, what happens when he loses all your money? What guarantee is there then?

I would run a mile if I heard this.