I have spent 10 years studying the Markets and It is driving me Fugging nuts. I start winning consistently for awhile then it doesn’t work. 2 straight years I have been truly successful when I was trading full time.Part time stock trading I SUCK.
Am i addicted to the markets? YES. I know every symbol every book.Is it killing me? Yes. Not being able to beat it is killing me slowly.
I wanted so much to impress my dad by being a successful trader I have lost my way.

In regards to Madoff, would you spend 5 yrs in jail for 100 million, How about 5 million. I SURE AS HELL WOULD.

a) 125k * 12% = 15k per year. Lets assume 1/3 is paid in taxes. This would leave about 10k per year in income. Assuming no compounding this adds up to 100k. For a total return of principal and income of approximately 225k (100k plus the 125k from the guarantee).

b) In this case lets assume after tax profits of 12% less a 1/3 tax hit was re-invested each year. Compounded over the 10 year period would have given a final value in the account of approximately 270k. Still under the SPIC limit and fully guaranteed!

So in each of these scenarios the Madoff investor may end up coming out SIGNIFICANTLY better than the stock market investor.

This analysis also raises some interesting questions. Since we now know that all the returns were fictional should the SPIC insurance insure the accumulated value of the investors account or just the original investment? Should investors who took the annual returns in cash be required to return cash? It is all very sticky and it will be interesting to see what happens.

One final point. We hear numbers about 20-50bln in losses (even 65bln in one article I read). In fact, we know now that Bernie was not investing the money he brought in at all. He was either putting it into his or his employees pockets or returning it as “income” to existing investors. Lets say Bernie paid himself and his staff 5bln over the years (a huge number and probably way over the actual number) then the remaining money was actually returned to investors. It was not “lost” it was just returned to the wrong people. There are likely many early investors who have handily outperformed the market simply based on the “returns” they received over the years, regardless of weather they get any of their principal back.

This raises some interesting questions about if or how money should be redistributed between early and late investors in the Madoff scam.

http://willworkforjustice.blogspot.com/2009/03/mark-cuban-is-right-on-madoff.html

1) Unless something has changed, the SIPC – which is funded by brokerage companies, not the government – only backstops a maximum of $100,000 in deposited cash and $500,000 in securities. So far, I have yet to see any evidence from the forensic investigation to suggest that Madoff’s firm invested in securities (not that I necessarily believe it) so I would assume anybody applying will only be eligible for the up to $100,000 portion at this time (and I’m going to presume it might only be available to U.S. residents.)

2) I know for a fact that, at least in the 1997-99 period, you couldn’t invest in Madoff without at least an entry of $2 million. If you had less, you had to sit on a “waiting list” whereby you’d be contacted if the fund changed the minimum requirement. I have no idea if that changed in more recent years since I never had clients ask about it after around that time.

1) Madoff was a crook. And any refund to investors from SIPC is coming from honest people’s taxes, not the market.

2) He chose very specific time frames to make his point. Someone in the comments above demonstrated different time-frames with much different results.

3) Two words: American Funds. Three funds in particular. ICA, which as been around since 1934 have averaged 11.9% INCLUDING 2008.

GFA has been around 35 years averaged 14%

NPF has been around 35 years averaged 12%

None has lost money in ANY 10-year period, including 2008.

Dirt cheap. Annual expenses less than 0.8%

Extremely low turn over.

Invest and forger. Remember, the market never loses money (it just moves around), but PEOPLE lose money, such as selling low (due to panic) or investing in suspect investments.