Over at the Journal today, you will find an amazing story chronicling an FBI sting operation called “Operation Pennypincher,” wherein an agent with the Federal Bureau of Investigation posed as a crooked hedge fund manager named John Kelly, of the fictional SeaFin Capital. Starting in 2010, Kelly (real name: John Keelan) invited people to his office, which was “tucked behind an auto-parts supplier in a Boston suburb” and asked them to “help him reel in executives of penny-stock companies willing to pay a huge kickback in return for an investment of up to $5 million by SeaFin.” (Naturally, these meetings were surreptitiously videotaped.)Update: One of the reasons that headline resonated is buried in this 2011 post:
One of the people with whom Kelly/Keelan took a meeting was Edward Henderson. A 71 year-old retiree from Rhode Island who previously worked as a stockbroker, Henderson was just your average guy looking for a straightforward scam with a nice little payoff....MORE
"Short 'em All. They Aren't Worth the Paper They're Printed On"
As I'm flipping between terminals and feed-readers it strikes me that I'm not interested in any of the news stories I'm looking at.
Valero reports nice crack-spreads but the stock appears to have double-topped.
China is doing a freight rail build-out that should be very positive for Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co., Ltd. but the stock may have started a head-and-shoulders top.
With the lazy days of summer coming on I think of a line by "Adam Smith":
“…For, after all, I had been into cocoa a bit myself. That was back when The Great Winfield had discovered cocoa trading. Occasionally in those more leisured days I would sit with him lazily watching stocks move, like two sheriffs in a rowboat watching catfish in the Tennessee River….”And then the voice of one of my mentors says "This is an opportunity".
I've mentioned him a few times...
...Jan. 9, 2008 Can you trust the First Bank of Nigeria?
...*One of my mentors, and one of the sharpest traders I ever met, had the most common flaw of students of markets, hubris. In his case it was non-fatal, more of a cost of doing business:...
...2) He got into a rigged blackjack game in Yugoslavia. Lost half-a-mil. Said he started to think it was was fixed when he was down a couple hundred.
Wife: "Then why the hell did you keep playing?"
Him: "I thought I could beat it".
