Practical analysis for investment professionals
13 December 2013

Weekend Reads for Investors: Madoff, Montier, and Marks

Posted In: Weekend Reads

Five years ago, Bernie Madoff’s Ponzi scheme was uncovered, and he was arrested and charged with criminal securities fraud. Months later he pled guilty and was sentenced to 150 years in prison. The Wall Street Journal’s interview with Madoff earlier this year reveals that five years behind bars has had little effect on Madoff’s remarkable arrogance and lack of contrition. Jason Zweig considers the recent boom in liquid alternative mutual funds to be the most ironic part of Madoff’s legacy. Investor trust was shaken by the Madoff scandal and the financial crisis of 2008, but global equity markets, with a little help from central bankers, have proven themselves resilient. How will stocks react when the central bank training wheels come off? We may find out soon.

Here are some worthwhile reads (and videos) you may have missed in recent weeks.

Strategic Thinking

Historical Perspective



Active Management

The Lighter Side

Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

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About the Author(s)
David Larrabee, CFA

David Larrabee, CFA, was director of member and corporate products at CFA Institute and served as the subject matter expert in portfolio management and equity investments. Previously, he spent two decades in the asset management industry as a portfolio manager and analyst. He holds a BA in economics from Colgate University and an MBA in finance from Fordham University. Topical Expertise: Equity Investments · Portfolio Management

2 thoughts on “Weekend Reads for Investors: Madoff, Montier, and Marks”

  1. Not Available says:

    Prison Break Madoff in my opinion.A financial deceit is not such a big crime.Madoff should have told his investors that their money could become zero also.
    Madoff is elder than most of us.I feel pity for his children.Financial loss should not translate into life loss.Money lost can be recovered but a life lost due to a financial loss can never return.
    VIX Index is like an index that measures how happy people are trading the market.

  2. Notwithstanding the tragedy of this financial loss, I would like to make some factual observations.

    1. Most hedge fund prospectuses, or offering memorandums, do in fact warn that investors could incur a total loss of capital.

    2. Documents relating to some Madoff feeder funds contained additional warnings about assets being sub-custodied by the manager could be vulnerable to misappropriation.

    3. Furthermore, most investors in Madoff feeder funds have in fact recovered varying percentages of their original investment, as the trustee, Irving Picard, basically “froze” the remaining assets and is redistributing them to investors according to various criteria. So its not accurate to suggest that most investors in Madoff feeder funds will have incurred a total loss of capital.

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