Monday, January 5, 2009

Madoff, Skepticism, Gullibility, Personality, Emotion, PT Barnum

It's long but well worth your time. The author himself, a well educated and financially savy investor lost 30% of his savings to the Madoff Ponzi scam. He takes you through a forensic analysis of how we can fall for these things and also includes great history showing this is nothing new.
Why We Keep Falling for Financial Scams
Notable quote (Hint - will be on the final exam!)
Skepticism is generally discussed as protection against beliefs (UFOs) or practices (feng shui) that are irrational but not necessarily harmful. Occasionally, one runs across a situation where skepticism can help you to avoid a disaster as major as losing one's life (being sucked into a crime) or one's life savings (being suckered into a risky investment). Survival in the world requires one to be able to recognize, analyze, and escape from those highly dangerous situations.

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