Image via WikipediaKen Fisher is pushing a book, and put in an appearance at the Commonwealth Club of California recently. His book is about Ponzi schemes generally, and the traits they typically share. Here's his list as best I can summarize it from listening to his appearance at the Commonwealth Club:
- Combines custody with decision-making; this means that your shares are held in-house and not with an independent third party.
- Numbers too good to be true/fees to low to pay manager/manager making money by "just trading."
- Investment strategy opaque, not understandable by laymen, or a trade secret.
- Markets things that don't matter but contribute prestige; has flashy hobbies; makes a big deal of associations with politicians or celebrities. Makes a big deal of impressive family history or impressive resume. Implies that he's offering you a special person or specially connected.
- Does not answer questions; resistant to due diligence; shuts down/out people who ask questions.