I recently read a fairly disturbing article in American Way Magazine entitled "The Kid."

It's about a 21 year old college student running an investment club called the "Shark Fund."

"an eye-popping 341 percent return since its inception." 

One of the highlights of Suleiman’s life: meeting (Jim) Cramer at a taping of the show at the CNBC studios in Englewood Cliffs, N.J. 

“Here’s a legend with a $100 million contract with CNBC, who doesn’t need to give me the time of day, and he’s taking the time to talk to me about stocks,”  

Suleiman says, still amazed. “He told me, ‘Keep going, kid, and don’t give up, because you’ve got something special.’ That moment really stuck with me.”

He has passed the milestone of a 300 percent fund gain, a tripling of cash that would have even market legends like Legg Mason’s Bill Miller — famous for beating the stock- market average for 15 straight years — green with envy.

"A year ago, his Value Trust fund had $16.5 billion under management. Now, after losses and redemptions, it has assets of $4.3 billion,  

according to Morningstar Inc. Value Trust's investors have lost 58% of their money over the past year, 20 percentage points worse than the decline 

on the Standard & Poor's 500 stock index.  These losses have wiped away Value Trust's years of market-beating performance.  

The fund is now among the worst-performing in its class for the last one-, three-, five- and 10-year periods, according to Morningstar."

There is also no record of him or his company having registered as an investment adviser with either the SEC or any state.

 That means that if he loses all of his classmate's money through dangerous, reckless, and inappropriate investments, they have no recourse.  

As if investors need anything else to worry about these days, news recently surfaced that one of the ten recently deported Russian spies was a financial adviser.

"Indeed, for the past 13 years, Ms. Murphy, whose real name is Lydia Guryev, worked as an adviser at Morea Financial Services Inc. in New York, where she reportedly earned an annual salary of $135,000. She was also a certified financial planner and a member of the New York chapter of the Financial Planning Association."

I guess it shouldn't be too surprising that the financial industry attracts more than its share of greed and corruption.

Read the whole story

"People who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge men into ruin and destruction."

-- 1 Timothy 6:9

In his most recent installment of doom and gloom financial pornography, Paul Farrell writes:

Warning:  Crash dead ahead.  Sell.  Get Liquid.  Now.

Fascinating.

Particularly when you consider these excerpts from his book, The Lazy Person's Guide to Investing:

"The only solution is to be in the market all the time and stop jumping in and out." 

"Never try to time the market; it's too much of a gamble." 

"The market is totally random, irrational, and unpredictable." 

"Greed triggers a buying frenzy at the top of a cycle. Fear creates a selling panic at the bottom. Investors lose both ways."

and the kicker.... wait for it....

"The more I know, the more I know I just don't know, and neither does anyone else."

Another book by Paul Farrell:

The New Money A$trology Success Formulas

A quiet battle has been going on recently regarding the "broker exemption" to the rule requiring investment advisers to adhere to a fiduciary standard of care with their clients.