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Re: Solutions, Self Defense and Best Practices

PostPosted: Fri Feb 15, 2013 4:55 pm
by admin
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I post this in the solutions section for the following reason:

The more I follow the money to find the crimes, the more and more I end up with the "buck" stopping, (or the moral blindness beginning) at the level of politics and politicians. Just saying, I have yet to find one that will show the moral courage to protect the public.......this solution might be necessary to change the rules and level the playing field for all. ... 21513.html

Re: Solutions, Self Defense and Best Practices

PostPosted: Tue Jan 29, 2013 10:13 am
by admin
Screen Shot 2013-01-29 at 10.10.26 AM.png

Petition :
Modifications to the Financial Services Compensation Fund of l'Autorité des marchés financiers (AMF)

To sign this petition, you must complete 3 steps:

Step 1: fill out the form that appears below the text of the petition and send it (you must accept the signing conditions before sending the form).
Step 2: consult your electronic mailbox and open the message sent by the Assembly.
Step 3: in this message, click on the link enabling you to register your signature.
You may sign a petition only once.

Petition text

CONSIDERING THAT Canada ranked fourth in a 2009 Price Waterhouse global economic crime survey and that a large number of fraud cases, especially Ponzi schemes occurred in Quebec;

CONSIDERING the financial loss to victims, many of whom lost their entire life savings for retirement resulting in a decrease in buying power and reliance on the Old Age Security supplement;

CONSIDERING the emotional, psychological and physical impact on the victims and their families;

CONSIDERING the lack of resources, budget and expertise available to police to investigate financial fraud and prosecute the perpetrators;

CONSIDERING the inability of the AMF to protect investors by ensuring that a registered broker is licensed to sell a specific financial product;

CONSIDERING THAT the AMF, police and regulators do not share information in order to prevent, detect and prosecute white collar crimes;

CONSIDERING the limitations of the Financial Services Compensation Fund, which provides coverage only for mutual funds and insurance products;

We, the undersigned, request that the AMF make victim compensation a priority, and that the Financial Services Compensation Fund also cover losses arising from fraud or insolvency related to a financial product sold by a registered member of the AMF, regardless of the type of product.

Signing conditions

Signing deadline : March 11, 2013 ... dium=email

Re: Solutions, Self Defense and Best Practices

PostPosted: Sun Jan 13, 2013 10:14 am
by admin
Screen Shot 2013-01-13 at 10.13.04 AM.png

I have been aware of this Vancouver money manager for some time now. They came to my attention again today so I did some more research on them, listening to their video and trying to understand their philosophy better.

I found myself quite impressed with the level of professionalism and I thought I would pass it along.

They strike me as the opposite to the Kevin O'leary style of loudmouth shouting…….., and the antidote to predatory bank investing.

I cannot assure anyone of anything except to say that they seem to be making solid moves in cutting out middlemen and acting as professional as is necessary in the industry.

Cheers and best



Re: Solutions, Self Defense and Best Practices

PostPosted: Sat Dec 22, 2012 7:40 pm
by admin
Screen Shot 2012-12-22 at 7.35.21 PM.png

AS the new year draws near, I’ve been thinking about what might make it a happy one for investors, taxpayers, home buyers and consumers. Herewith, a short wish list:
A 2013 Guide to Better Behavior in Business
Published: December 22, 2012

First, when regulators like the Securities and Exchange Commission settle with individuals after investigations, why not require those people to pay a sizable portion of the fines and penalties out of their own pockets? Only then will these deals deter bad behavior.

Having these parties pay up would solve a big problem:

-- they are typically covered by shareholders of the company in question, or by that company’s insurer. Making shareholders pay seems unfair. But that’s the way it is now.

There is a precedent for making individuals in such cases accept financial responsibility:

-- the 2005 settlement in an investor suit against WorldCom directors. Having presided over its huge accounting fraud and 2002 collapse, the company’s directors were required to personally pay $18 million. Insurance covered the remaining $36 million.

The amount that each director paid represented 20 percent of his or her net worth. Lawyers representing investors in that case made personal payments a requirement of the settlement. This should not be an anomaly.


And how about requiring some penalty for failure when regulators mess up on the job? We’ve all seen the disastrous results of financial regulators’ failure to identify problems and nab scofflaws in the years leading up to the credit crisis. And yet, none have been held accountable for these transgressions.

Perhaps this is not surprising, given that almost no one in the private sector has been held responsible for misdeeds during the mania. But regulators should operate with a higher sense of duty to the taxpayers they serve. When they fail in that regard, there should be consequences.


Why not ensure that investors get all the information they need to conduct extensive due diligence before agreeing to buy complex securities? This may be the only way to blunt the credit ratings agencies’ power or, better, make them disappear.

Five years after investors suffered billions of dollars in mortgage losses owing to the incompetence of Moody’s and Standard & Poor’s, it is beyond frustrating that these agencies still conduct their businesses as usual. And while the Dodd-Frank law was supposed to reduce the government’s reliance on credit ratings, that goal has not been achieved. Reform of the industry seems to have stalled.

The ratings agencies have also managed to continue hiding behind the defense that their ratings are opinions and subject to First Amendment protection from litigants. Being subject to lawsuits for their failures would surely encourage these companies to be more diligent. Maybe some of the ratings-agency suits inching through the courts will get rid of this free speech fiction once and for all.


Finally, wouldn’t it be nice if executives acted like leaders and accepted responsibility for the actions of their companies and their employees?

This dream came to mind while reading a deposition of Angelo R. Mozilo, the founder of Countrywide Financial. His testimony took place in June 2011 but was filed two weeks ago with the New York State court that is hearing a suit brought against Countrywide by M.B.I.A., the mortgage insurer.

Mr. Mozilo is rarely heard from these days. So his views on the collapse of his company and industry are of interest.

Early in the deposition, the lawyer for M.B.I.A asked this of Mr. Mozilo: “After all the foreclosures and ruined lives and lawsuits, including the losses to M.B.I.A., do you have any regrets about the way you ran Countrywide?”

An excellent question, given the carnage that Countrywide left behind.

But not to Mr. Mozilo, who answered with a version of history that is his alone. “This is a matter of record,” he said. “The cause of the problems of foreclosures is not created by Countrywide, nor M.B.I.A. This is all about an unprecedented, cataclysmic situation, unprecedented in the history of this country. Values in this country dropped 50 percent.”

He continued by noting the financial misery at many banks, as well as at companies like A.I.G. and institutions like Fannie Mae and Freddie Mac.

“This is not caused by any act of Countrywide or by any act of M.B.I.A.,” he said. “It was caused by an event that was unforeseen by anyone, because if anybody foresaw it, you would never have insured it, we would never have originated the loan. And it spread across the world. So that’s the issue. All these lawsuits is — was created by nothing that anyone did, any one company did. Any judgment made on a foreclosure — on a loan being made is because values deteriorated.

“And for the first time in the history of this country, people decided that they were going to leave their homes because the value of their home was below the mortgage amount,” Mr. Mozilo said. “Never in the history of this country did that ever happen, and that could never have been assessed in the risk profile. These people didn’t lose their jobs. They didn’t lose their health. They didn’t lose their marriage. Those are the three factors that cause foreclosure. They left their home because the values went below the mortgage. That’s what caused the problem.

“So I have no regrets about how I — how Countrywide was run. It was a world-class company,” Mr. Mozilo went on. “So your tirade about foreclosures and lawsuits is nonsensical and insulting. Countrywide did not cause this problem. We made no loans in Greece. We made no loans in Ireland. We made no loans in Portugal. This is a worldwide financial crisis that was totally a shock to the system.”

Mr. Mozilo’s state of denial is pretty breathtaking. He did a fine job. That’s his story, and he’s sticking to it. Shareholders of Bank of America, who have shouldered billions of liabilities in its acquisition of Countrywide, might feel a bit differently. ... iness&_r=0

Thanks to Joe Killoran for sending along this story to us.

Re: Solutions, Self Defense and Best Practices

PostPosted: Thu Dec 20, 2012 10:22 am
by admin
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FAIR Canada’s 2013 Wish List
With 2012 drawing to a close and a new year imminent, FAIR Canada has drafted a wish list of investor protection improvements it would like to see implemented in the coming year:

1. Implement a best interests standard

There is a distinct expectations gap between what is required of “advisors” and what is expected by consumers. Consumers are led to believe that advisors make recommendations in their best interest, but no such standard is actually in place. Often, consumers are unaware that the financial services providers that they receive “advice” from are simply salespeople pushing high-cost financial products. When things go awry, advisors’ defense is that the investments were “suitable”, which is a much lower standard. FAIR Canada wishes that “advisors” were required to provide advice that is in the consumer’s best interest, in line with consumer expectations.

If advisors do not wish to be subject to a best interest standard they should be required to use a title such as “salesperson” and should be required to warn consumers in all marketing and advertising that they are not required to recommend products that are in the best interests of clients and should be precluded from making any representation that suggests to clients that they act in the client’s best interests.

2. Ban all forms of third-party embedded commissions (particularly trailing commissions) and encourage real price competition between mutual funds

Trailing commissions carry serious potential for conflicts of interest and present high, opaque costs to consumers. Mutual funds are marketed by manufacturers to “advisors” on the basis of how much advisors will earn in commissions – a perverse form of price competition where there are incentives to create more expensive products in order to increase compensation to incentivize advisors to sell their products. FAIR Canada wishes that securities regulators would seriously consider banning trailing commissions.

At an absolute minimum, investors should be told of any costs or fees (including specifics about trailing commissions) clearly and in plain language both before they invest (in Fund Facts) and after (in annual cost reports). The investment fund industry’s continued opposition to the disclosure of trailing commissions is an indication that the industry worries that if investors were aware of these costs they would question what services they received for the money they paid and would seek lower-cost alternatives.

3. Protect consumers from leveraged speculation in investment products

FAIR Canada is concerned about systemic risks presented by leverage in retail customers’ investment accounts. We are concerned that some financial institutions irresponsibly promote borrowing to invest as an investment strategy despite the fact that in the vast majority of cases it is not appropriate for the consumer and despite the fact that Canadians are already heavily indebted. We have raised with securities regulators the issue of inappropriate practices and relationships between banks who provide investment loans (including related institutions) and registrants, where consumers may be encouraged to take out loans while they are still in their advisor’s office. In particular, we recommend that regulators undertake targeted compliance reviews and canvass dealer member firms to determine the extent of this problem.

FAIR Canada wishes that regulators would address the issue of inappropriate recommendations of leveraged investing to retail consumers in order to provide an adequate level of protection. Leverage sale of mutual funds, segregated funds and other high-fee financial products is not investment, it is speculation and clearly not suitable for the great majority of consumers.

4. Fair resolution of consumer complaints

FAIR Canada supports mandatory participation of all registrants in the Ombudsman for Banking Services and Investments (“OBSI”) and would like to see OBSI or a single, statutory ombudsman empowered to issue binding decisions. FAIR Canada wishes that financial industry participants would participate in OBSI in good faith in order to maintain and improve upon the existing non-statutory ombudsman system so that complaints are resolved in a manner that is fair and reasonable.

FAIR Canada is concerned about the lack of commitment to fair consumer dispute resolution by some banks and investment firms, specifically their strong opposition to participating in the OBSI.

We would also like to see regulators take action should participants fail to comply with OBSI recommendations. Any “name and shame” should trigger an inquiry into whether the firm complied with its supervisory obligations and whether it had acted fairly, honestly and in good faith in resolving the client’s complaint (as required by law) and whether they participated in the OBSI process in good faith.

5. National comprehensive consumer-friendly registration check

Securities regulators tell investors to check the registration of anyone selling investments and to only deal with registered representatives. However, we do not think that regulators appreciate the difficulty consumers encounter in conducting a proper registration check. Regulators need to provide a single, national comprehensive background check that Canadians can easily use to check the background, registration status, proficiency and disciplinary history of registrants. The system should also include self-regulatory organization membership information. The current system is very complicated and necessitates the search of several databases. It also requires the consumer to know the registered name of the firm, although this may not be the business name the consumer knows. FAIR Canada wishes for a simplified, comprehensive, national one-stop source for registration and disciplinary information for consumers.

6. Crowdfunding: A dumb idea whose time has come!

FAIR Canada believes that permitting equity crowdfunding would pose great harm to investors. SEC Commissioner Luis Aguilar has stated that this initiative “would be a boon to boiler room operators, Ponzi schemers, bucket shops, and garden variety fraudsters, by enabling them to cast a wider net, and making securities law enforcement much more difficult.” FAIR Canada wishes that Canadian governments and securities regulators would make it clear that crowdfunding is too risky and will not be permitted in Canada.

7. Informed regulatory reform of exempt market

FAIR Canada is concerned about investor abuses in the exempt market. There is a dearth of meaningful information available to the public about how investors invest in the exempt market (and who such investors are) and the extent of fraud in the exempt market. Current regulatory statistics lump retail investors in with institutional and professional investors such as banks and pension funds. FAIR Canada questions the ability of regulators to oversee such markets or to undertake informed regulatory reform in the absence of such information.

The consumer “accredited investor” exemption is conceptually unsound. There is large-scale non-compliance, a lack of regulatory oversight, and it is a source of significant fraud. Let’s fix the accredited investor exemption in 2013. The Northwestern Exemption orders, in particular, pose an even greater threat to investor protection in the Western provinces. FAIR Canada wishes that the “accredited investor” exemption be reformed, that the Northwestern Exemption orders would be revoked in order to protect investors in these jurisdictions, and that regulators would obtain and provide to the public meaningful detailed data on exempt market activity.

8. Better enforcement

Regulators should prosecute all frauds and unregistered sales of securities where consumers have lost money as a result of the illegal conduct and not simply take administrative proceedings where fraudsters receive a slap on the wrist. More prosecutions would further deter fraud and misconduct.

FAIR Canada believes a simple fix for 2013 would be to provide the self-regulatory organizations (“SROs”) (that is, IIROC and the MFDA) with the power to collect fines when an individual ceases to work for an SRO-regulated firm. This would serve as a better deterrent against misconduct. Additionally, we believe that requiring the firm to pay the fine if the registrant does not would encourage improved compliance at firms.

FAIR Canada wishes that SROs had the power to collect fines, that firms were liable for their registrant’s unpaid fines, and that prosecutions of illegal distributions and fraud be increased in order to better protect investors.

We have many other wishes for 2013, but we will limit our list to 8 items given that we are entering the holiday season. FAIR Canada is thankful for the input it has received over the past year from our newsletter subscribers and others about issues of importance to you. We thank you for reading and encourage you to write to us about other wish list items you would add to the list for 2013. ... wish-list/

(Advocate comment. Despite FAIR being an industry-funded organization, which has worried advocates for "best industry practices", I am encouraged and impressed with this level of candour and courage coming from them in this list. I hope it is a sign of things to come to protect Canadians.)

Re: Solutions, Self Defense and Best Practices

PostPosted: Thu Dec 13, 2012 8:19 pm
by admin
Screen Shot 2012-12-13 at 8.17.35 PM.png

Petition to The Quebec National Assembly:

Modifications to the Financial Services Compensation Fund of l'Autorité des marchés financiers (AMF) (Quebec provincial securities commission)

Petition text

CONSIDERING THAT Canada ranked fourth in a 2009 Price Waterhouse global economic crime survey and that a large number of fraud cases, especially Ponzi schemes occurred in Quebec;

CONSIDERING the financial loss to victims, many of whom lost their entire life savings for retirement resulting in a decrease in buying power and reliance on the Old Age Security supplement;

CONSIDERING the emotional, psychological and physical impact on the victims and their families;

CONSIDERING the lack of resources, budget and expertise available to police to investigate financial fraud and prosecute the perpetrators;

CONSIDERING the inability of the AMF to protect investors by ensuring that a registered broker is licensed to sell a specific financial product;

CONSIDERING THAT the AMF, police and regulators do not share information in order to prevent, detect and prosecute white collar crimes;

CONSIDERING the limitations of the Financial Services Compensation Fund, which provides coverage only for mutual funds and insurance products;

We, the undersigned, request that the AMF make victim compensation a priority, and that the Financial Services Compensation Fund also cover losses arising from fraud or insolvency related to a financial product sold by a registered member of the AMF, regardless of the type of product. ... index.html

quebec, petition, amf

Re: Solutions, Self Defense and Best Practices

PostPosted: Sat Dec 01, 2012 6:22 am
by admin
Screen Shot 2012-12-01 at 6.17.24 AM.png

Fiduciary duty is nice but that will take a considerable time to introduce. What can be done in the interim?

Here's my Top 10:

Require dealers to provide personalized rates of return for each client account

Require dealers to prepare an IPS (Investment policy statement) for all accounts greater than say $50,000

Improve the NAAF (New Account Application Form) form , standardize it across the industry and clarify relationship disclosure and importance of form on KYC (Know Your Client) ( and liability) AND ensure KYC is signed off by client upon origination and when updated or revised

Require dealers to document how they determine client risk tolerance and match to recommendations and risk capacity

Hold dealers accountable for all regulatory fines imposed on employees and agents ie make dealers responsible for payment

Sanction and fine dealers for utilizing misleading sales and marketing materials

Sanction and fine dealers for deficient complaint handling processes

Implement enhanced control and compliance policies and procedures for dealing with the elderly, new immigrants and the infirm

Prohibit any registrant from using any title that implies an advisory role unless the person meets minimum qualifications and the dealer provides personalized rates of return , discloses dollars and cents fees and states the limitations and nature of product recommendations

Empower OBSI to make its recommendations binding on dealers (see related topic on OBSI (Banking Ombudsman)

PLUS maybe

Redirect some financial literacy resources to assist investors to better deal with Bay Street ie "Baystreet proofing"

Allow Canadian dealers to sell US mutual funds that are under US regulatory authority

Introduce Point of Sale disclosure for mutual funds and similar products

Put index linked GIC's , PPN's, Seg funds and the like under provincial securities Acts

Make Engagement letters mandatory for all registrants who hold themselves out as advisers


Ken k


reply #1

Great list Ken

What would be really helpful is if statements required not only a personalized rate of return - but also a comparison to the proper composite benchmark.

Warren MacKenzie

Weigh House Investor Services


reply #2

Include comparison of Personal R of R to advisor's client average, firm's average and industry average subject to audit.

Dan B


Reply #3


Ken, how about a pre-emptive move to inform the public to determine IF the person they are dealing with is a salesperson or a licensed advisor?

Alternatively, inform the public to ASK for a written fiduciary duty as a matter of best practices (and tell them why it important). Then perhaps a public "pull" might cause it to happen before the industry pushes it in on the "12th".

Is this (and your list) something of a "public interest project" that could be undertaken sooner than waiting for the powers that be?

Vulnerable people are being hurt pretty badly out there for every year that this thing gets talked about.

Thanks for the discussion.

Reply #4

Larry...that makes sense...or even make it more proactive by requiring all "advisors" to state state in writing at the start of the client relationship and annually thereafter, whether the interaction is on a fiduciary relationship or not...this would make the "fiduciary" relationship status information an advisor "push" rather than a client "pull", much more effective since clients are mostly clueless about the topic or assume that "advisor" already acts in the client's best interest.


Reply #6

I agree that more paperwork would be counterproductive. However, what might work is a upfront statement by a person selling financial products as to whether or not—he is an “advisor” or considers himself to be “an advisor”. If his business cards etc.—read ‘Licensed to sell insurance’ or ‘licensed to buy and sell bonds and shares’ then O.k. from there it is buyer beware. What should be illegal (in my view) is for mutual fund salesperson, insurance salespersons, stock brokers beind designated by their employers as being an ‘advisor’. similarly, individuals should be forced to tell potential clients

i) exactly what it is that they do (i.e.” I buy and sells stocks and bonds and I charge to you a commission’)
ii) it should be clear at the start of any new client relationship—how the broker, mutual fund guy whatever—is compensated

i) and ii) above should be covered by an industry wide statement which is brief, readable and enforceable. It definitelt should not be written by lawyers employed by the firms involved

Re: Solutions, Self Defense and Best Practices

PostPosted: Wed Nov 28, 2012 9:38 am
by admin
Mr. K, what should I look for in an adviser? I've gone through 3 with bad results Rene Lebeouf , Montreal
Response: As investor advocates we recommend the following:
 Understands there are 3 risks- risk tolerance, risk needed to meet objectives and risk capacity
 Understands seniors issues e.g de-accumulation [ as applicable]
 Is current on basic income tax issues or has access to such expertise within the dealer.
 Client statements are meaningful [ and accessible online]
 Investors are told their personal rate of return per account for various time periods.
 The dealer must be a member of OBSI
 Has documented approach to risk mitigation
 Fees decrease with asset size or fee-only
 Can run simulations e.g Monte Carlo
 Signs a Letter of Engagement
 Prepares an Investment Policy Statement
 Is willing to act as a fiduciary.
 Is a professional like a CA , MBA or CFA . [ strong analytical skills]
 Works for a registered dealer with a good reputation and comprehensive tools/databases

Thanks to for the above list
From their December 1, 2012 "Observer". Get on their mailing list for a regular update of everything happening in the world of "best investment Practices".......... and a few things in the world of worst.

Re: Solutions, Self Defense and Best Practices

PostPosted: Wed Nov 21, 2012 8:30 pm
by admin
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50 Unfortunate Truths About Investing

Found on Motley Fool. Funny, but so true....

Sorry, but ...
1. Saying "I'll be greedy when others are fearful" is much easier than actually doing it.

2. The gulf between a great company and a great investment can be extraordinary.

3. Markets go through at least one big pullback every year, and one massive one every decade. Get used to it. It's just what they do.

4. There is virtually no accountability in the financial pundit arena. People who have been wrong about everything for years still draw crowds.

5. As Erik Falkenstein says: "In expert tennis, 80% of the points are won, while in amateur tennis, 80% are lost. The same is true for wrestling, chess, and investing: Beginners should focus on avoiding mistakes, experts on making great moves."

6. There are tens of thousands of professional money managers. Statistically, a handful of them have been successful by pure chance. Which ones? I don't know, but I bet a few are famous.

7. On that note, some investors who we call "legendary" have barely, if at all, beaten an index fund over their careers. On Wall Street, big wealth isn't indicative of big returns.

8. During recessions, elections, and Federal Reserve policy meetings, people become unshakably certain about things they know nothing about.

9. The more comfortable an investment feels, the more likely you are to be slaughtered.

10. Time-saving tip: Instead of trading penny stocks, just light your money on fire. Same for leveraged ETFs.

11. Not a single person in the world knows what the market will do in the short run. End of story.

12. The analyst who talks about his mistakes is the guy you want to listen to. Avoid the guy who doesn't -- his are much bigger.

13. You don't understand a big bank's balance sheet. The people running the place and their accountants don't, either.

14. There will be seven to 10 recessions over the next 50 years. Don't act surprised when they come.

15. Thirty years ago, there was one hour of market TV per day. Today there's upwards of 18 hours. What changed isn't the volume of news, but the volume of drivel.

16. Warren Buffett's best returns were achieved when markets were much less competitive. It's doubtful anyone will ever match his 50-year record.

17. Most of what is taught about investing in school is theoretical nonsense. There are very few rich professors.

18. The more someone is on TV, the less likely his or her predictions are to come true. (U.C. Berkeley psychologist Phil Tetlock has data on this).

19. Related: Trust no one who is on CNBC more than twice a week.

20. The market doesn't care how much you paid for a stock. Or your house. Or what you think is a "fair" price.

21. The majority of market news is not only useless, but also harmful to your financial health.

21. The majority of market news is not only useless, but also harmful to your financial health.

22. Professional investors have better information and faster computers than you do. You will never beat them short-term trading. Don't even try.

23. How much experience a money manager has doesn't tell you much. You can underperform the market for an entire career. And many have.

24. The decline of trading costs is one of the worst things to happen to investors, as it made frequent trading possible. High transaction costs used to cause people to think hard before they acted.

25. Professional investing is one of the hardest careers to succeed at, but it has low barriers to entry and requires no credentials. That creates legions of "experts" who have no idea what they are doing. People forget this because it doesn't apply to many other fields.

26. Most IPOs (initial public offerings) will burn you. People with more information than you have want to sell. Think about that.

27. When someone mentions charts, moving averages, head-and-shoulders patterns, or resistance levels, walk away.

28. The phrase "double-dip recession" was mentioned 10.8 million times in 2010 and 2011, according to Google. It never came. There were virtually no mentions of "financial collapse" in 2006 and 2007. It did come.

29. The real interest rate on 20-year Treasuries is negative, and investors are plowing money into them. Fear can be a much stronger force than arithmetic.

30. The book Where Are the Customers' Yachts? was written in 1940, and most still haven't figured out that financial advisors don't have their best interest at heart.

31. The low-cost index fund is one of the most useful financial inventions in history. Boring but beautiful.

32. The best investors in the world have more of an edge in psychology than in finance.

33. What markets do day to day is overwhelmingly driven by random chance. Ascribing explanations to short-term moves is like trying to explain lottery numbers.

34. For most, finding ways to save more money is more important than finding great investments.

35. If you have credit card debt and are thinking about investing in anything, stop. You will never beat 30% annual interest.

36. A large portion of share buybacks are just offsetting shares issued to management as compensation. Managers still tout the buybacks as "returning money to shareholders."

37. The odds that at least one well-known company is insolvent and hiding behind fraudulent accounting are high.

38. Twenty years from now the S&P 500 (INDEX: ^GSPC ) will look nothing like it does today. Companies die and new ones emerge.

39. Twelve years ago General Motors (NYSE: GM ) was on top of the world and Apple (Nasdaq: AAPL ) was laughed at. A similar shift will occur over the next decade, but no one knows to what companies.

40. Most would be better off if they stopped obsessing about Congress, the Federal Reserve, and the president and focused on their own financial mismanagement.

41. For many, a house is a large liability masquerading as a safe asset.

42. The president has much less influence over the economy than people think.

43. However much money you think you'll need for retirement, double it. Now you're closer to reality.

44. The next recession is never like the last one.

45. Remember what Buffett says about progress: "First come the innovators, then come the imitators, then come the idiots."

46. And what Mark Twain says about truth: "A lie can travel halfway around the world while truth is putting on its shoes."

47. And what Marty Whitman says about information: "Rarely do more than three or four variables really count. Everything else is noise."

48. The bigger a merger is, the higher the odds it will be a flop. CEOs love empire-building by overpaying for companies.

49. Investments that offer little upside and big downside outnumber those with the opposite characteristics at least 10-to-1.

50. The most boring companies -- toothpaste, food, bolts -- can make some of the best long-term investments. The most innovative, some of the worst. ... snv0000001

Re: Solutions, Self Defense and Best Practices

PostPosted: Mon Oct 29, 2012 4:26 pm
by admin
Similar thoughts for here in Canada.......

Screen Shot 2012-10-29 at 5.25.59 PM.png

Bair: 5 Steps to Fix Wall Street
By Barry Ritholtz - October 29th, 2012, 12:00PM
I like this short list of fixes from Sheila Bair:

1. Break up the “too big to fail” banks
Giant institutions and untested “living wills” is make financial system unstable. When the Fed is artificially keeping lending rates at near zero, that’s a flaw.

Solution: Make ‘em smaller

2. Publicly commit to end bailouts
“Market must punish the boneheads.” We should learn from post-2008 bailouts is we should never allow ourselves to be in that position again. Wall Street cannot have an indefinite option to “put” its losses to the Treasury and to taxpayers.

Solution: Make penalties for asking for and getting bailouts egregious — wipe out shareholders, fire management.

3. Cap leverage at large financial institutions
“Bank capital levels maybe isn’t a mainstream issue, but it should be;” Limit banks’ abilities to take on risk via leverage or derivatives or whatever the latest “idiotic new innovation” Wall Street becomes infatuated with.

Solution: Go back to firm 10 to 1 leverage rules.

4. End speculation in the credit derivatives market
If arsonists can’t buy fire insurance on someone else’s house, why allow speculation using credit derivatives? Credit default swaps with no vested interested are the same thing.

Solution: Require CDS buyers to demonstrate a specific interest. Even better regulate CDS as insurance products.

5. End the revolving door between regulators and banks
Separating regulators from the regulated is crucial. Ending regulatory capture is key.

Solution: Require longer periods of time between industry and regulator service.

Re: Solutions, Self Defense and Best Practices

PostPosted: Fri Oct 26, 2012 2:38 pm
by admin
Best proposed "solution" to investment advisor misrepresentation and it's myriad of forms allowable today:

"What about recommending a two standard approach?

If you call yourself a 'salesperson' then there is no fiduciary responsibility.

If you hold yourself out as an advisor or similar term, you are accepting of the fiduciary responsibility.

Terms like 'registered representative' are industry insider terms and should not be used to address the public."


(mike wins)

Re: Solutions, Self Defense and Best Practices

PostPosted: Thu Oct 25, 2012 8:06 pm
by admin
(prediction from a cynic.......the well intentioned proposals mentioned herein, will be implemented in Canada on the 12th..................of never. With billions of dollars each month transferred from the hands of the unsuspecting, and the trusting, over to the hands of the cunning and the clever, those cunning and clever folk will talk this one into eternity. Just saying.....)

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1) Introduction
2) Background
October 25, 2012
Administering the Canadian Securities Regulatory System

link to entire document here:

and for when they remove it like they removed the FAIR DEALING MODEL PROPOSALS of the past decade (similar client protective proposals which were also put into effect on the 12th of never) it is saved here:

Re: Solutions, Self Defense and Best Practices

PostPosted: Thu Oct 18, 2012 8:53 am
by admin
A bit to the side of those who who use the high moral ground of "trusted" financial institutions, political power, and regulatory authority, to do immoral things to others for money........but close enough to connect another dot in my mind. Enjoy.

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In April of 2009, the governor of the Bank of Canada, Mark Carney, announced that the bank would be holding its benchmark interest rate steady for the next 15 months. Around the world, the reaction was instantaneous and universal: “Ah. I guess that means the Bank of Canada will be holding interest rates steady for the next 15 months.”

When the governor says he will do something, that is, people believe him. That credibility is partly personal, partly institutional. It is a reputation that has been earned over many years, under both Carney and his predecessors: A Bank of Canada governor does not make promises he will not keep, or say things he knows to be untrue. More than an expectation, it is almost a definition.

Contrast that with his counterparts in politics, even in the highest office. Were the prime minister — any prime minister, at least of recent times — to announce the time of day, most people would disbelieve it. That, too, is a matter of reputation. Prime Ministers have told such whoppers of late — have gone to such escalating efforts to convince the public that this time they really meant it, only to betray them yet again — that their position has been greatly weakened.

They have institutional power. They do not have the broader power that comes with credibility, of being able to shape events not directly, but indirectly, through the expectations and actions of the public. The governor can assume the public’s trust, and plan policy accordingly. A prime minister, having squandered the public’s trust, cannot.

Of course, a Bank of Canada governor — like other independent office-holders, the Auditor General, the Parliamentary Budget Officer, the Privacy Commissioner, and so on — does not have to campaign for election, or worry that he will be bumped aside by a more unscrupulous rival. Integrity of that kind, a politician might say, is a luxury he cannot afford.

And of course he would be right. Politics is about packs; the more ruthless, more disciplined, more pack-like of the parties mauls the others into submission. It prizes loyalty, not before all other virtues, but to their exclusion. We hunt together, the aspiring politician is told. Stick with the pack. And so each learns to scrape and smear, to manipulate and deceive, to promise one and threaten another, exactly as he is told.

That is how institutional power is won. Everyone understands that. What is interesting is what happens when power collides with principle: when the pack confronts, not another pack, but a determined individual of conscience. Nothing has prepared the pack for this. Faced with someone they cannot frighten, and who does not want anything from them, they are bewildered. All of their normal tactics and approaches are suddenly useless. All of their power turns to dust.

We are seeing this just now with regard to the Parliamentary Budget Officer. Various ministers of the government have been sent out to smear him, first claiming he was incompetent, then, when his numbers were borne out, that he was exceeding his authority. Through it all the PBO has kept digging, kept issuing his reports, kept demanding to see the data to which he is entitled under the law. And slowly, grudgingly, the government has been forced to yield.

But this is hardly the first time we have seen this play. When Auditor General Sheila Fraser’s report on the sponsorship scandal came out in 2004, accusing Liberal Party officials and friendly bureaucrats of conspiring to break “every rule in the book,” there were furtive attempts to go after her as well. Whisper campaigns were put about to the effect that she was out of control, that she was embarked on a “witch hunt.” We recall how that turned out. Whatever institutional power the government might have possessed, Fraser’s reputational power demolished it. It wasn’t even a fair fight.

The current government fared no better in its efforts to smear its own appointee as Auditor General, Michael Ferguson, after his report exposing mismanagement and fraudulent bookkeeping in the F-35 program. Even as the government was pretending to accept his findings the former parliamentary secretary to the Defence Minister, Laurie Hawn, was circulating a letter accusing the Auditor General of misunderstanding such basic terms as “acquisition,” of being unable to get basic facts right, even of being “disingenuous.” But the public knew whom to believe.

To be sure, part of the power of an auditor general or parliamentary budget officer, like that of a Bank of Canada governor, is institutional: they have certain powers and immunities that make it difficult for governments to intimidate or resist them. But much of it depends on the conduct of the individual in that office, and of its previous occupants — the reputation for independence and integrity they accumulate over the years.

And part of it is cultural. As cynical as we may be about our politicians, there is something ingrained in Canadians that honours the individual who will not “be reasonable,” will not “go along,” will not accept that “this is how it has always been done.” That isn’t true everywhere, but it is here. When the call to conscience comes, it finds an echo. But the reason we know what it sounds like is because we have had examples — because of those individuals in our past who have been willing to stand up, alone if necessary, against the power of the pack. I have in mind one such in particular. ... ven-close/

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Re: Solutions, Self Defense and Best Practices

PostPosted: Tue Oct 16, 2012 9:09 am
by admin
I am fairly certain that I have not given anyone "advice" on specific investments to buy, for quite a number of years, finding it far more important to talk about "right and wrong' types of investing processes, and not focus on the smaller picture........having said that I have to say that I believe the following CO-OP organization to be part of the "right" way for un-informed investors to learn as much (or more) than your average mutual fund salesperson. It was begun by a former investment rep who saw a better way to treat the public, and he went ahead and did it. The result is a shareholder owed co-op, like Mountain Equipment Co-op, for example, where for as little as $75 you can become a member and start down the road to becoming as proficient an investor as you could ever hope for. No sales pitch, no product sales, no corporate bull. This is a great solution for Canadians.

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Investors-Aid Co-operative of Canada is a national web-based co-operative and Canada’s only national consumer organization for investors and savers.

Investors-Aid is a consumer co-operative run by members for members and provides current consumer information, investor education, advisories, services (financial planning, dispute support, group plan consultation, pension consultation) and special advisory services that can significantly reduce costs using best products and practices.

We believe investing and saving should be safe, simple, and low cost.

We are independent and objective and sell NO investments, management services, referrals, or paid advertising.


Co-op profits are directed back to members by keeping membership, service, and subscription fees as low as possible.

Co-operatives in Canada

Investors-Aid is just one of thousands of co-operatives and credit unions working in Canada.

Like all co-operatives, we are an organization run by our members and guided by 7 principles:

1. Voluntary and open membership

2. Democratic member control

3. Member economic participation

4. Autonomy and independence

5. Education, training, and information

6. Co-operation among co-operatives

7. Concern for community

Who we are


Garth Rustand, BA (AppSc), CIM, FCSI. Executive Director

Founder of the Investors-Aid Co-operative with over 20 years experience in the investment industry. He has a BA(AppSc) from SFU, the Canadian Investment Manager's Designation (CIM); and is a Fellow of the Canadian Securities Institute (FCSI).

Gerald Yung, MBA, CFA, Director

President & Portfolio Manager of Claremont Advisors Ltd. Over 18 years experience in the investment industry first as a research analyst and then as a portfolio manager specializing in emerging markets.

Steve Middleton, C.Tech. Director

25 years engineering experience, most recently in construction supervision and management, Steve brings an analytical approach to investments and a keen interest in technology.

Tony Dobson, M Ed, Director

A retired teacher with 23 years experience and Masters of Education. He continues to work with a software company providing educational services and products for educational institutions.

Advisory Board

Debby Wetmore MBA CA, consultant Saltspring Island, B.C.

Dave Malcolm BCIT instructor (retired) School of Business, Burnaby, B.C.

Derek Moran BA, CFP, fee-only Financial Planner /Smarter Financial Planning, Kelowna, B.C.

Richard Vetter BA, CFP, CLU Financial/Insurance Planner, WealthSmart Financial Group

Michele Tao CA/CPA Claremont Advisors, Victoria, B.C.

Katharine Lamoureux, Bookkeeper

Michelle Somerville, Researcher

Accountant: Laven & Co. CGAs

Legal: Richard Bridge LLB

Supporting Groups who put on our courses and use our publications:

BC Institute of Technology
Capilano College
Vancouver School Board
Burnaby School Board
Certified General Accountants of B.C.
BDO Dunwoody Chartered Accountants
Institute of Chartered Accountants of Alberta

We would also like acknowledge the kind support of the BC Co-operative Association.


Who owns the Co-op?
The coop is owned by all of is members. Members also direct the broader activities of the Co-op by voting on key issues.

Why can’t I get all this information from my advisor?
Because of their compensation system, advisors and the firms they work for tend to recommend high cost products and strategies. Information on the best, low cost solutions for consumers is usually unavailable.

What is the quickest way to find out about all the Co-op products and services?
Take the website tour and then do the Investor Report Card Questionnaire.

Can I get help with investment & administrative questions?
Yes. Go to the Member to Member blog under contact to ask those questions.

Can the Co-op help me in a dispute with an investment firm?
Yes and we can direct you to other individuals or organizations who can.

Re: Solutions, Self Defense and Best Practices

PostPosted: Sat Oct 13, 2012 5:03 am
by admin
Wow. It is 5:00 am and I am putting this up here, just realizing that this topic (and this post) is the rare 2% of the time when I get to suggest something positive, something pro-active, instead of the 98% of my time and effort spent spotting and educating about the problem (crying WOLF!)

It is either early and my blood sugar is out of whack or this is truly a positive step I share this morning, you decide.

From the helpful Canadian finance and investment blog THE CANADIAN COUCH POTATO comes this article about low fee index funds coming along at fees well under one half of one percent annual costs. I way wow again.

This is as a result of competition, a more informed consumer, Vanguard funds coming into Canada, and a number of things, coming together to create the perfect conditions to benefit Canadian investors. While I in no way purport to give investment advice (whatever the zombie-lawyer-regulators define that as today......) or suggest one investment over any other, I do purport to spot and talk about safe and sound (or bullshit) investment concepts, and this is one-o-the-prior.

Here is what I posted on my facebook page today:

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Price War!.......beginning to appear......Wallmart-style price rollbacks getting underway in investment fees!! (Thanks Couch Potato)
In a hallelujah (just try spelling that at 5:00 am) moment for this man, I see BMO (Bank of Montreal) moving towards taking the commission middleman out of the mutual fund game. (dropping two-full-percent off fund costs mathematically DOUBLES ones future value over 35 years....) This is either an historic moment for the average Canadian investor or I am having hallucinations. ... ep-falling