Penn Wealth Publishing

2021.08.22 Penn Wealth Report Vol 9 Issue 03

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Penn Wealth Publishing Subscription Information Penn Wealth Publishing 9393 West 110th Street 51 Corporate Woods Suite 500 Overland Park, KS 66210 4 penn wealth Report volume 9 issue 03 22 aug 2021 Penn Wealth Report Copyright 2021. All Rights Reserved. From the Editor/ Whether or not American showman P.T. Barnum ever actu- ally uttered the words "ere's a sucker born every minute" is irrelevant—the point is well taken. A major aspect of the invest- ment world—from tulip mania to cryptocurrencies—has always been showmanship; after all, it takes some theatrics to get mil- lions of people to part with their hard-earned dough. We have no problem with the marketing of investment vehicles per se, but we do have a problem with enthusiastic buyers jumping in before performing even a minimal amount of due diligence. To an alarming degree, that seems to be where we are right now. Several months ago, as I was ruminating about an issue of e Penn Wealth Report revolving around more questionable investment vehicles, something popped on the screen, almost on cue: Bernie Madoff had been found dead on the floor of his prison cell. A couple of years ago, I recall hearing a quote from Madoff saying that he "had never been more at peace in his life." So much for remorse. e fact that this showman had so many highly-intelligent clients willing to entrust large percentages of their wealth to him speaks volumes about the power of persuasion over logic. If any- one dared to question his investment practices or the legitimacy of his rather remarkable alleged returns, he would send their money back and they would become persona non grata. A warn- ing sign for others to fall in line and question nothing. We are not comparing the vehicles in this report to Madoff's expensive shell game; for example, we believe that cryptocurren- cies are here to stay, and that investors will find many golden opportunities in the space over the coming years. What we are saying, however, is that too small a percentage of those who invest in vehicles they barely understand will ever perform the basic market research required to achieve long-term success. Reading social media posts about a position may be entertaining, and perhaps even enlightening, but it takes a deeper dive into the true fundamentals of a company to determine if it is worthy of a cash outlay. Certainly, there are the Andrew Fastows (CFO of Enron) and Scott Sullivans (CFO of WorldCom) who will simply cook the books, but those are rare instances. In the overwhelming major- ity of cases, the true numbers are simply sitting there, waiting to be deciphered by a trained eye, all at no cost. For newer and more exotic investments, a dearth of financial information does make the task more difficult, but that is when an investor must lay out a viable case for the company's successful liftoff. And the case must be built on sound evidence, not social media threads or the lofty aspirations of the CEO (Nikola founder Trevor Milton comes to mind). If nothing else, use these brief narra- tives as a reminder that things aren't always as they appear. Learn to perform the basic research, and have some fun along the way! —MSH Michael S. Hazell editor-in-chief A Timely Issue, with Timeless Reminders When investors cannot discern highly-orchestrated theater from real opportunity, trouble awaits.

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