Kloster Owens

Last month a big story that made the rounds inside the monetary media was Jim Cramers (of the Street.com) statement that some hedge fund managers spread false rumors about a business to large trading desks and the media to drive-a stock price lower. He said this practice is illegal, but easy-to do 'because the SEC [Securities Exchange Commission, the U.S. regulatory body] does not understand it.' Furthermore, since the fact is really against your view, the acutely wealthy former hedge fund manager boasted, Whats crucial if you are in hedge fund mode, says Cramer, is to not do any such thing remotely genuine.

For all those of you that remain skeptical regarding the dishonest techniques of companies and investment professionals, probably a partners admission will finally convince you. Why these reports also make big headlines is beyond me. As a former industry expert myself, Ive been saying for many years that the investment industry is filled with investment professionals, everybody else from financial consultants to individual wealth managers to professional money managers, hard at work weaving the emperors new clothes. However, only when a big mouth like Cramer speaks of the dishonesty that netted him great success does it attract attention.

For those of you unfamiliar with the fantasy The Emperors New Clothes I would like to summarize it for you. Way back when in a kingdom, there lived an emperor whose vanity was popular. Two swindlers, Luigi Farabutto and Guido, knew they could capitalize on this emperors character defect to create a big pro-fit. They acknowledged the emperor and told him that they would sew him the best suits of a very high priced special fabric that would be invisible to anyone that was ridiculous or of low character. The emperor, fearing he would not be able to see the clothes, sent two of his men to go see the suits. The men came back, and afraid to inform the emperor they couldn't begin to see the garments, told the emperor that the suits were probably the most beautiful suits they'd ever seen.

He didn't wish to admit that he could not see the clothes for fear of being considered stupid and of low character, once the emperor visited see the Farabuttos, knowing that his servants was in a position to see the clothes. Therefore h-e proceeded to allow herself to be dressed in clothes to get a march through town and proceeded to walk through town in his underwear. When he came upon a young boy that said