Like many of you, I’m so upset about the collapse of crypto: NOT! As the recent bankruptcy of FTX and other crypto currencies and related companies demonstrated, much of the wealth in the crypto space was at worst a Ponzi scheme and at best an example of the greater fool theory. I’m not smart enough to understand the touted benefits of blockchain technology or how that fits in with crypto currencies or Non-Fungible Tokens (“NFTs”), let alone assigning a value to any of it. And I do feel bad for people who lost money they couldn’t afford to lose by getting in near the peak when you couldn’t watch five minutes of the Super Bowl without seeing a celebrity being paid what I assume were enormous sums of money (or Bitcoin) to tell us what we were missing. Do I think people were duped? Yup. Do I think someone other than the “dupee” should be liable for their losses. ABSOLUTELY NOT! If you put your hard-earned money into unregulated investments that you likely don’t understand, Caveat Emptor folks.

I’ve seen so many bubbles in my investing career that the gloating and then silence of those who found and lost fortunes is almost predictable. You name it, the internet bubble at the turn of the century where a company merely owning a website bestowed rich valuations upon it. Think of such generational stalwarts as Webvan and Pets.com. The housing bubble of 2005-2007 when banks handed out no-income verification loans like Halloween candy and everyone’s former delivery-driving cousin was flipping houses from their boat off the coast of somewhere. Being a rational investor during those times could be exhausting as twenty somethings were on TV telling people like me that we were dinosaurs.

Do you want to use your dollar to buy a dream? Go buy that lottery ticket. At least you know in New York that a portion of your dollar will be spent on education and that a portion will be winnings to the lucky few. I can grasp that, and you can too! Yes, it really is just another form of regressive taxation (more on that from me never).

As an investment manager with a not insignificant amount of clients’ money to steward, I get emails and calls daily from salespeople at insurance companies, mutual fund and alternative investment managers with investment products that are perfect for my clients; clients who they don’t know! I have a New York State insurance license, undergraduate and graduate degrees in finance and decades of investment experience and I can’t figure out the fees and expenses of insurance policies sold as investments by reading the contract. Having reviewed policies owned by clients (prior to engaging my services), I only know that after owning those policies for years, many policy owners have taken market risks with little or no return for their money even in rising markets. I can only conclude that the fees are too high and/or they have limited participation to the upside. If you know, please enlighten me.

I like being an “independent” financial advisor and investment manager. “Advisors” (I’m willing to incur their wrath with my suggestive quotation marks) affiliated with banks, brokers and insurance companies are often incentivized to fill clients’ portfolios with products being pushed by the corporate machine. If you don’t produce profits, you aren’t likely to be around long.

Long story short, unless you work in venture capital, private equity or have a good understanding of your local real-estate market, invest in something comprehensible that can reasonably be valued by an experienced investor. If you aren’t that experienced investor, find a fiduciary to do it for you. If those investments are in securities, it should be those that are regulated. Yes, people in publicly traded, SEC registered companies, sometimes lie and commit crimes that hurt the shareholders of those companies. But they sign their names to their companies’ public filings and that attestation, if fraudulent, can come with civil and criminal penalties. I feel I can rely on Tim Cook’s signing of Apple’s financial statements more that Sam Bankman-Fried’s financials scribbled from his lair in the Bahamas. In case you don’t know Sammy, he is the soon to be orange jumpsuit wearing, former leader of now bankrupt FTX. If I had to make a choice, I’d take my chances with Timmy.