How Buffett is Playing the Market - Page 3

DanS. · 02-25-2008, 12:51 PM

Quote:

Originally Posted by slowhand

I was curious about it..I dont know much about the market..I have a few shares of stock that I inherited from my parents, and were doing good untill the housing crash, and have been thinking to either take the money and run, or play the market a bit.....And lose some more money

There is a company...I don't remember who does it...but basically they insure you investment at a 5% return...so basically you could shoot the moon and invest in a lot of risky stuff and if it doesn't do well you are still guaranteed the 5% return...but if it does well you can reset the insurance at the current market value...so let's say you invest $20,000 and it grows to $100,000....you can then reset it at $100,000 and are guaranteed 5% return on that....A-Freaking-Mazing if you ask me.

slowhand · 02-25-2008, 01:02 PM

Quote:

Originally Posted by DRS112

There is a company...I don't remember who does it...but basically they insure you investment at a 5% return...so basically you could shoot the moon and invest in a lot of risky stuff and if it doesn't do well you are still guaranteed the 5% return...but if it does well you can reset the insurance at the current market value...so let's say you invest $20,000 and it grows to $100,000....you can then reset it at $100,000 and are guaranteed 5% return on that....A-Freaking-Mazing if you ask me.

Is that 5% annually, or monthly?

DanS. · 02-25-2008, 01:11 PM

Quote:

Originally Posted by slowhand

Is that 5% annually, or monthly?

I don't now...but the difference isn't THAT huge...monthly $100,000 at 5% is $164,700 after 10 years....while annualy it would be $162,889

Noob920 · 02-25-2008, 01:33 PM

Quote:

Originally Posted by DRS112

There is a company...I don't remember who does it...but basically they insure you investment at a 5% return...so basically you could shoot the moon and invest in a lot of risky stuff and if it doesn't do well you are still guaranteed the 5% return...but if it does well you can reset the insurance at the current market value...so let's say you invest $20,000 and it grows to $100,000....you can then reset it at $100,000 and are guaranteed 5% return on that....A-Freaking-Mazing if you ask me.

A-Freaking PONZI SCHEME is a better term for it.

DanS. · 02-25-2008, 01:34 PM

Quote:

Originally Posted by Noob920

A-Freaking PONZI SCHEME is a better term for it.

How so? Like I said...I don't even remember who does it...so I'm not all that familiar with it. I should add it was a major company...and you were bound to a contract for x number of years....so it wasn't some short-term deal....I think their gain from it was being able to get a 10-12% return on the 5% they're paying you...

Noob920 · 02-25-2008, 01:39 PM

Quote:

Originally Posted by DRS112

How so? Like I said...I don't even remember who does it...so I'm not all that familiar with it.

1. NO investment company can "guarantee" a return..its against Federal Securities Laws.
2. 5% a MONTH? How do THEY make money? Even at an ANNUAL rate, this sounds high, given current rates...

unless you're missing something here, its impossible to do...

DanS. · 02-25-2008, 01:40 PM

Quote:

Originally Posted by Noob920

1. NO investment company can "guarantee" a return..its against Federal Securities Laws.
2. 5% a MONTH? How do THEY make money? Even at an ANNUAL rate, this sounds high, given current rates...

unless you're missing something here, its impossible to do...

I did edit my post...but...it is against the law to insure an investment?

Noob920 · 02-25-2008, 01:49 PM

Quote:

Originally Posted by DRS112

I did edit my post...but...it is against the law to insure an investment?

Insuring an investment is one thing(FDIC, SIPC) investments are insured against the risk of the company(brokerage, bank, etc) going bankrupt - guaranteeing a return is another..

DanS. · 02-25-2008, 01:51 PM

Quote:

Originally Posted by Noob920

Insuring an investment is one thing(FDIC, SIPC) investments are insured against the risk of the company(brokerage, bank, etc) going bankrupt - guaranteeing a return is another..

guaranteeing a return is illegal because brokers will use "strong arm tactics" pretending that you are guaranteed a return...when in reality you aren't....This doesn't have anything to do with it.

Noob920 · 02-26-2008, 09:16 AM

Quote:

Originally Posted by DRS112

guaranteeing a return is illegal because brokers will use "strong arm tactics" pretending that you are guaranteed a return...when in reality you aren't....This doesn't have anything to do with it.

Ask yourself this: IF THIS SO-CALLED FIRM CAN GET A 20% RETURN, WHY CAN'T ANYONE ELSE?

If something appears to good to be true, it usually is.

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