How I lost $250,000 in Phuket.

[AWOL Geordie]

Don't ever trust anyone in the amazing LOS...

I would trust any Thai (except ones wearing suits, who are in the small minority) before I would trust most Westerners.

Yes. This scam was conceived entirely by Westerners. The IFA, the fraudsters and the liquidators are all Western. I just happened to be based in Phuket at the time. The Investors are based globally.

I wish I'd never met Barry Payne. I wish I'd never gone to Phuket. I wish I had a time machine.

[NoshowJones]

Don't ever trust anyone in the amazing LOS...

I would trust any Thai (except ones wearing suits, who are in the small minority) before I would trust most Westerners.

Yes. This scam was conceived entirely by Westerners. The IFA, the fraudsters and the liquidators are all Western. I just happened to be based in Phuket at the time. The Investors are based globally.

I wish I'd never met Barry Payne. I wish I'd never gone to Phuket. I wish I had a time machine.

Sorry about everything that happened Geordie, I hope everything works out for you in the future.

[oxo1947]

.

Edited January 1, 2015 by oxo1947

[Evolare]

Even expert advice from reputable accredited sources is a gamble at best. But Gordie I hope you can recover from this fast it's sad to hear people getting scammed like this.

Edited January 1, 2015 by Evolare

[maidee]

The OP earned that money therefore he is going to make it again. The "people" who took it, well take and it's going to be taken.

that is a strange comment

what if you worked many years in your home country, then sold it all, your condo and/or business, came to thailand and invested it in something you tought was safe ?

how will he/you/anyone ever recover that kind of money, now you are here without a WP !

not everyone makes 100.000$ per year like most of the posters seem to be, on paper at least

[kennypowers]

Time to contact Tim Sharky and get your money back; for a fee, of course.

[richusa]

Fake post

[MobileContent]

I use to get persons with British accents calling me all the time at my office wanting to invest my money. They were very quoi at keeping you on the phone. Eventually I had to get rude and just started hanging up on the them. Now my secretary screens the calls.

I am too always getting those calls so my solution was providing them the Bangkok number of the Immigration by telling them give me a call to my other number in 2-3 hours. They never called again..

[Ludacris]

OP, your story is truly heartbreaking, especially since you played it safe your entire working life with your savings.

It must have taken a lot of soul searching to publicly post it so that others won't make the same mistakes.

I really believe that investing and portfolio management/allocation should be taught in every high school. Since you had most of your money in the bank for such a long time you most likely didn't have a lot of investment experience before taking the plunge. If I can take the lesson you're trying to convey here one step further it would be that everyone should learn the in's and out's about proper portfolio allocation before making a single investment and how it should change over a lifetime to manage risk. Foreign & domestic equities, bonds, and possibly REITS along with maybe a bit of gold and other commodities should make the core of any portfolio (hopefully diversified using indexed ETF's or mutual funds) with more than one major brokerage.

I know lots of people have lost money in the stock market with speculative and/or single company stocks or private funds. The reality of risk in the stock market for a properly allocated and diversified portfolio for someone close to retirement is that it would have regained all of it's value in just a few years even after 2008.

A fund like the one you invested in would be classified as a speculative-alternative investment and should be limited to 2-3% of a portfolio. Studies have shown you need to invest in at least 30 stocks to almost eliminate the risk from any one stock or investment- how many court cases was the fund going to be 'investing' in? I also don't understand how the initial capital could be protected since if a court case is lost the money paid to the lawyers is not refunded, and I highly doubt any insurance company would insure against losing a court case. I have no idea what kind of hedge could have been used, and the brochures you saw only said they were 'sophisticated' which raises red flags.

I'm not trying to come across as "I told you so" and if this post helps just one person it's worth it.

The best book ever written on the stock market and investing in my opinion is "A Random Walk Down Wall Street" by Malkiel.

[richusa]

Fake post

[Asiantravel]

OP, your story is truly heartbreaking, especially since you played it safe your entire working life with your savings.

It must have taken a lot of soul searching to publicly post it so that others won't make the same mistakes.

I really believe that investing and portfolio management/allocation should be taught in every high school. Since you had most of your money in the bank for such a long time you most likely didn't have a lot of investment experience before taking the plunge. If I can take the lesson you're trying to convey here one step further it would be that everyone should learn the in's and out's about proper portfolio allocation before making a single investment and how it should change over a lifetime to manage risk. Foreign & domestic equities, bonds, and possibly REITS along with maybe a bit of gold and other commodities should make the core of any portfolio (hopefully diversified using indexed ETF's or mutual funds) with more than one major brokerage.

I know lots of people have lost money in the stock market with speculative and/or single company stocks or private funds. The reality of risk in the stock market for a properly allocated and diversified portfolio for someone close to retirement is that it would have regained all of it's value in just a few years even after 2008.

A fund like the one you invested in would be classified as a speculative-alternative investment and should be limited to 2-3% of a portfolio. Studies have shown you need to invest in at least 30 stocks to almost eliminate the risk from any one stock or investment- how many court cases was the fund going to be 'investing' in? I also don't understand how the initial capital could be protected since if a court case is lost the money paid to the lawyers is not refunded, and I highly doubt any insurance company would insure against losing a court case. I have no idea what kind of hedge could have been used, and the brochures you saw only said they were 'sophisticated' which raises red flags.

I'm not trying to come across as "I told you so" and if this post helps just one person it's worth it.

The best book ever written on the stock market and investing in my opinion is "A Random Walk Down Wall Street" by Malkiel.

Oh here we go-it didn't take long for the stock market apologists to come out, implying even surreptitiously that investing in stocks and shares in January 2015 is less risky?

Saying “the reality of risk in the stock market for a properly allocated and diversified portfolio for someone close to retirement is that it would have regained all of it's value in just a few years even after 2008 “ is rubbish because the stock market would never have recovered at all unless the governments pumped trillions of dollars in the form of QE. Where are the economic fundamentals today to support today's astronomic valuations when people's real incomes all around the world have fallen dramatically while debt is skyrocketing? Even UK Prime Minister David Cameron warned a couple of months ago the conditions are ripe for yet another global financial crisis. if you want to define Ponzi - it's the world's stock markets in 2015.

Japan has tried every trick in the book to revive its moribund economy and yet, after 25 years it is still in a coma. If you had invested even in the bluest of blue chip stocks in Japan in 1990 when the index was over 35,000 you would have lost over half of your portfolio, which has never even recovered in 25 years (see graph below)

[gigman]

Sounds like a nice lad dddave. What happened to virtues like integrity, honesty and honour?

555

Such things just evaporating in this world and starting from our elected governments....

So...I am not surprised anymore. ...

[jpeg]

You found out the hard way not to trust anyone in Thailand,

especially when money or property is involved,just hope you

are able to get back on your feet again,it would also be nice

if you could get some justice,but that rarely happens.

regards Worgeordie

Although I agree with NOT being able to trust anyone here, farang or Thai, I don't agree j'ustice rarely happens.' It's mostly because many farang give up at the first of many hurdles or listen to the bullsh1t here on TV.

[Ludacris]

The P/E ratio of the S&P500 is at 18, which is no where near historical highs so I don't understand what you mean by 'astronomical valuations.'

Regarding Japan, I never said to invest your entire portfolio in Japanese equities. My comment was for an international portfolio that is properly allocated between domestic, foreign, and emerging markets as well as between equities, bond, and REITS.

There's no point in debating this on Thaivisa; the research can stand alone. If you want to talk doomsday scenarios read the book I suggested first and pm me.

[jpeg]

Rule Number 1: Never ever take 'advice' from slimy b4st4rds in suits.

[Ulic]

Sorry to hear about your loss. I had a best friends wife invest her cash savings 250k USD in an investment scam

called "Prime Rate Debentures" in 1993. An extraordinary rate of return based on money being leveraged in bank

to bank to bank churning of loans/deposits. Of course all done at off shore banks in tax havens with secrecy emphasized

to avoid taxes. Slick presentations at private by special introduction of friends only. (They were all being scammed)

Of course the thing that comes to mind when I was told about it was "if it sounds to good to be true......." I did not

have the minimum amount to invest but the returns were so good it would not have been difficult to borrow the money.

I said let me know how it turns out because it was intriguing. (This was just before the time of the internet becoming popular

so not easy research and get information by using Google/Yahoo like it is now) Of course the whole thing was a scam. 6 years

later an acquaintance/colleague told me of this same investment scam that he had just invested in. I told him of my

friends wife's experience. (Remember the whole thing was supposed to be hush hush to avoid the tax man) He told

me the next day it was a completely different investment vehicle and asked me to just forget about anything he had said.

I am not sure how long it took for him to realize he had been scammed, maybe years. These guys are slick and professional.

They know what they are doing and the right promotional information to present. There is a lot invested to create the

surroundings of legitimacy, just look at Bernie Madoff. Sorry for your losses and thanks for sharing your story.

It may save someone else from the same fate.

[rakman]

Sounds like a nice lad dddave. What happened to virtues like integrity, honesty and honour?

Barack Obama got the Nobel Peace Prize.

Michael Mann tortured data enough to create the "Hockey Stick" graph, which ignored the Little Ice Age and the Medieval Warming Period.

[MJP]

It's all relative : I lost 1.2 million USD dollars in the stock market - 90% of my life savings, and barely got through it intact..but then I was away from Thailand and those low balconies..

It's a hell of a learning experience

but it pales in comparison to losing your health!!!!

but it pales in comparison to losing your health!!!!

I could not agree more. Once health is lost it's pretty much all over. F the money!

OP, good post and good luck. Well done for being man enough to share your experience.

[smotherb]

Sounds like a nice lad dddave. What happened to virtues like integrity, honesty and honour?

The same thing that happened to the virtues of intelligence, common sense, and good judgment.

[Asiantravel]

The P/E ratio of the S&P500 is at 18, which is no where near historical highs so I don't understand what you mean by 'astronomical valuations.'

Regarding Japan, I never said to invest your entire portfolio in Japanese equities. My comment was for an international portfolio that is properly allocated between domestic, foreign, and emerging markets as well as between equities, bond, and REITS.

There's no point in debating this on Thaivisa; the research can stand alone. If you want to talk doomsday scenarios read the book I suggested first and pm me.

I am giving Japan as an example of where the rest of the world is heading. The whole world is relying on a mountain of debt to get by day today (now at $60 trillion globally). Nobody needs research to understand a simple premise which applies to your own credit card i.e. something's got to give sooner than later if peoples real incomes are falling but debts are still growing ?

Edited January 1, 2015 by Asiantravel

[smotherb]

Went to an investment seminar some years ago. The hosts were promising heavy returns without risk. I pulled out $20 bill and waved it in the air shouting, "Look, look, what I found taped under my seat." You should have seen the butts in the air searching for money under their seats. One of the presenters angrily shouted, "What would make you do such a thing?" I replied, "Just wanted to see how many gullible people were here." I left, and about about ten people followed me out the door thanking me.

[The manic]

This not really a Thai problem. Fianacial advisers all round the world are crooks.

[Robert24]

thanks for sharing this AWOL Geordie.

Personally I don't think it's such a huge mistake to invest in this fund, the capital guarantee is actually being offered by many other products in the market as well, some mutual funds guarantee 95%, some 90% and some 100%. That's not a red flag, that's a common product offered. And we have seen hugely popular funds going up in a Ponzi scheeme, remember the Bernie Madoff case where many banks and famous investors have put there money in? It's not always easy to know up front what works out and what not.

I think your biggest mistake was not to diversify. If you would have invested 5 or 10% in this fund, you can easily absorb the loss. My investment philosophy is always to diversify. You did not do that. You put all eggs in one basket and by doing so you took a big risk of that one investment to work out. I always recommend not to put more than 20% in one asset class to diversify, i.e. 20% stocks, 20% property, 20% bonds, 20% precious metals/commodity, 20% cash/money market products. By doing so you participate on the upside say if bonds/property/stocks go up but you also reduce your risk of a huge loss, say if there is a market crash somewhere or one of funds investment goes under in a Ponzi scheme.

[frank0424]

I feel for you AWOL Geordie, but any return that offers more interest that the banks pay is dangerous.

If it was safe, we'd all mortgage everything we have, borrow money from the bank and invest in it.

The banks would probably invest in it too.

[aircooledflat4]

I'm a maths teacher (ironic given this financial folly)

Maybe not ironic at all.. especially if you went into this thinking Maths teachers are somehow exempt from brain explosions...

Sorry to tell you but even Maths teachers have got to trust their instincts and gut feelings sometimes, just like the rest of us mere mortals. Maybe Maths teachers are particularly vulnerable in this regard.

Just curious, did you happen to inform the financial adviser that you were a Maths teacher? You might have been hoping, deep down, he couldn't possibly pull the wool over your eyes "coz I'm too smart for that".. <<<that could be the root of your downfall right there..

[ubonr1971]

dude, sorry to hear your story.

You have a nice writing style. This could be your new job?

I once had a financial adviser that I met on this forum try to persuade me to invest my cash in an offshore savings fund. I laughed at the idea.

good luck guy

[Robert24]

I feel for you AWOL Geordie, but any return that offers more interest that the banks pay is dangerous.

If it was safe, we'd all mortgage everything we have, borrow money from the bank and invest in it.

The banks would probably invest in it too.

To be honest, most investors incl the big money managers and banks themselves try to get a better return then what banks offer on a savings account. If you put the money on a savings account at a bank, your real interest is negative, i.e. if you deduct inflation of approx 4% from the interest rate of approx 2%, your real return is negative 2% meaning you loose every year 2% of your capital. This is not what an investor should do. You should at least get a return above the inflation rate. Whether that is in property, stocks, bonds etc.

and bear in mind that money on a bank savings account is also not 100% safe. You still have the counterparty risk with the bank which is also not risk free. So hence my comment about diversifying.

[lj cm]

Very interesting story. Thank you for sharing it and sorry for your loss.

I've had zero % profit from my investments in 2014, but now I actually feel happy about it.

[Mudcrab]

True story and this definately happened to me in Thailand. Myself and 5 other farang investors were robbed of our collective investment. This amount was around 15 million baht. Our farang investment banker was murdered by his Thai gay lover. His death sentence came delivered via cockroach poison deposited in a can of ice cold Coca Cola. The Thai police ruled it a suicide immediately of course. As a group, we hired lawyers and a private investigator. They found evidence of murder, followed the missing money. The farang bankers Thai gaylover was now in complete control of all monies, funds, assets and computer records. The Thai police were informed... alas, nothing could be done. The gay lover was related, by blood, to the highest of high connections. Sit down and shut up. Case closed. Go away farangs. Forever.

Edited to say, that up to a year prior to the bankers murder, I was receiving regular deposits in my Thai bank account of 170,000 baht per month based on my initial investment. All told, after roi, I lost approximately 400,000 baht cash on the investment. I'll survive. Others weren't as lucky.

So you gave 15 million baht to an investment banker.

Was that cash?

He presumably didn't actually put it in a bank of any description.

The gay lover kills him.

Then, the gay lover, gets his hands on the money...the money was hidden under the bed?

Or did the gay lover have exclusive access to the bank account?

You could probably get your money back, maybe even more by taking this to Hollywood!

[roo860]

At this moment nobody has lost anything with the Argentum Fund.