Who needs roll-up-your-sleeves fundamental analysis to pick stocks when you could simply rely on the alignment of the stars or stock-picking robots?
These are just two scams that recent stock schemers convinced wealthy wannabes to invest in, according to SEC documents. And when you read those documents, its very hard to feel sorry for the victims.
Most recent case in point: A few days ago, the Securities and Exchange Commission charged that a former broker Gurudeo Buddy Persaud (As a policy, I never trust a guy whose name is Buddy) convinced family, friends, and other gullible individuals into investing in his firm, White Elephant Trading Co. All Buddy did was guarantee their money would be safe and throw off returns ranging from 6 to 18 percent.
And how would he pull this off? Persaud promised to invest in the debt, stock, futures and real estate markets.
However, Persaud kept to himself his secret sauce: The belief that markets are affected by gravitational forces. (Who can blame him? Everyone knows the top hedge fund managers NEVER give up their proprietary methodology.) According to the SECs complaint, Persaud mainly relied on a website that provided directional market forecasts based on lunar cycles and gravitational pull. How do these forces impact the markets? Persaud believed that gravitational forces affect mass human behavior, and in turn, the stock market. According to the SEC, Persaud believed when the moon exerts greater gravitational pull on the Earth, people feel dejected and are more inclined to sell securities.....