Weekend Investor: Buy An Investment…Get A Check
I’m old enough to remember those Chrysler commercials when Lee Iacoccca famously stated: “Buy A Car…Get A Check!” This was the 1980s when a Billion dollars was real money. Chrysler successfully lobbied the U.S Government for a Billion dollar loan, while at the same time hocking loans to consumers that promised free money. (And I thought this ‘government intervention’ in private companies was a new 2008 thing!)
I have always admired Iacocca he turned around Chrysler and he was a self made man who at his best is a pure salesman. He’s the main reason why I invested in Chrysler in my middle school investment contest. I made a lot of money (on paper anyway).
But as a financial move, you have to think that buying a car and getting paid to do it doesn’t sound like a financial move that would make sense. And of course your gut would be right because the check he gave you simply was a loan built into the car loan that he is selling you.
And unfortunately, this same kind of game is played by the Ponzi schemers parading around as investment managers. They promise big returns and what better way to demonstrate it than by providing big checks? The returns are good until of course the checks stop coming as they must.
If you are investing in great companies the best thing that they can do for you is to send you checks, because this is the best statement that a company can make to its shareholders. It’s too bad that other people parading checks are not so genuine about their reasons.