Some years ago, a study was done where 100 monkeys picked the stocks to buy and sell on the New York Stock exchange. They did it just as well as 100 expert Wall Street money managers who, in a parallel study, did the same thing. There’s a lesson here somewhere.
In this regard, a letter about finance written by Osama Bin Laden in 2010 has been made public. It had been found in the house in Pakistan where one of the Navy seals shot him in the head.
Bin Laden favored gold. The letter was addressed to one of his managers. He told him to take the $1.7 million in ransom money they’d just received and divide it into three parts. One part should go into gold, he wrote, “The overall price trend is upward. Even with the occasional drops, in the next few years the price of gold will reach $3,000 an ounce.”
A second part should be invested in Euros and a third part put in a bank for expected terrorist expenses.
For a while, Bin Laden’s advice did quite well. The price of gold went up to $1,900, but then never further. Presently, it’s wandering around at just around the $1,000 he bought it for. Had he put it all in a bank, he’d have done better.
In a second piece of news this week, the owner of Robins Island, a private island in Peconic Bay just off Southampton, announced that his charitable foundation might have been the victim of a $25 million fraud scheme allegedly perpetrated by a well respected Wall Street tycoon.
The accused perpetrator is Andrew Caspersen, a Princeton and Harvard Law School graduate and the son of wealthy Finn Caspersen, who is now deceased. Casperson junior was a rich managing director in PJT Partners Inc.’s Park Hill Group, a firm that advises on such things as mergers, restructurings and how hedge funds and private equity firms can raise capital. (According to The Wall Street Journal, the company said it was “‘stunned and outraged’ by his alleged misconduct.”) Prosecutors say he created a fake investment company, siphoned off tens of millions of investor dollars for his personal use, and lost almost all of it on risky investments.
There was an article in The New York Times the other day about this. He’d gotten not only other investors to put money in the fund, the story said he’d also allegedly put into it funds from his brothers, mother and friends.
This pales in comparison to the $65 billion that Montauk’s Bernie Madoff defrauded everybody out of years ago. But it is of interest for two reasons.
One is that Louis Bacon, the owner of Robins Island and reportedly worth billions, has a subsidiary called Robins Island Holdings, LLC that was used to buy the island in 1993. Bacon saved it from development when he bought it, and pledged to keep it in its natural state, which he has so far certainly done. The holding company has also bought waterfront parcels of land in Southold and Southampton to save them. But now there’s this unfortunate multi-million dollar slice out of his charity. Everything changes, eventually. Nothing stays the same. What happens to Robins Island?
The second reason this is of interest is because Wall Street wants to know why a very successful financier would do such a thing. Andrew Calamari of the SEC said, “As alleged, Caspersen engaged in a brazen fraud.” If guilty, this will likely ruin him. He could also go to prison.
Caspersen, it’s been said, didn’t need the money. He and his family inherited great wealth. He has added to it through his career. The implication from some reports is that someone desperate might do something like this, but not someone like Caspersen. He and his wife and family lived high on the hog—private schools, Harvard, expensive home, the works.
Some people have noted that Caspersen’s father, also a wealthy money manager, killed himself at the age of 67, in 2009, without leaving a note. After his death, he was found to have been under investigation for possibly misusing offshore bank accounts to avoid paying taxes.
I remember a very similar situation about a Wall Street guy when my dad first moved our family out east 50 years ago.
This man was a wealthy member of the social set in East Hampton yet was convicted of selling bogus stocks to his friends and neighbors. The astonishing thing now is that after he went to jail, he was still hawking his bogus stocks to friends and family from the payphone in the prison.
They say history repeats itself. Could be.