[pwd72s]

Originally Posted by LWJ

I am exiting from a closely held investment currently. I bought in with significant reservations but had reasons that out-weighed the risk at the time. Since I bought in, I have seen other folks buy in. One person mortgaged his house to the absolute maximum (and is paying 7% I believe for this!) and used the cash to buy this investment.

My current analysis recognizes the fundamental problem as not being resolved. There are other issues as well. I reviewed this investment with someone who has significant experience with these sort of items and he thought the risk was even higher than I do.

But the folks who own it? Not one has asked me as to why I am exiting. They all think I have absolute rocks in my head. And one is super angry at me for not selling my portion to him.

When a prospectus says "past performance is not an indicator of future returns" are people completely blind?

I understand the allure of this investment. There are many reasons to buy it other than the return. The fact that nobody sees risk here is shocking to me.

Sorry about being so very vague about the investment. I can't discuss it any other way. My point is human behavior. All the investors are feeding back on each other about how this is the greatest thing ever. When the investment has a number of issues that could cause it to go sideways. Odd.

And then, Bernie Madoff became successful.

Borrowing to invest is a fool's errand..

(edit) This is why I only invested in quality mutual funds. I know my odds of outwitting brokerages and others with all their MBA's and supercomputers would be slim and none. To each their own, but no individual stock picking for me.