Lawsuits against Fisher Investments

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ddb
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Lawsuits against Fisher Investments

Post by ddb » Wed May 20, 2009 3:11 pm

[restarted old thread, check posting dates before responding]

I don't usually have much of a reaction when I read about lawsuits against anybody, because it could always just be a case of somebody looking for easy money.

Still, this article about lawsuits that Fisher Investments is facing caught my eye. In particular, note the following:

A lawsuit making a similar allegation was filed by an investor this month in federal court in Houston. In that suit, the investor, Maurine Ford, claims that Fisher Investments caused “significant losses” to a living trust that the firm started to manage in June 2008.

Prior to that, her trust was managed by Lighthouse Capital Management LP of Houston, from which Fisher Investments bought the client assets last year.

“Upon the transfer of the trust’s investment account from Lighthouse to Fisher Investments, the asset allocation in the trust’s account was as follows: cash 27%, fixed income 32% and equities 41%,” the lawsuit states. “Fisher Investments recommended that [Ms. Ford] reallocate the trust’s portfolio to invest 100% in equities,” the suit states.


I wasn't too surprised to read this, because I've always heard that Ken Fisher has one model: 100% stocks. Still, to buy out an asset management firm and wholesale shift everybody into a 100% stock model definitely sounds lawsuit-worthy. Pretty easy to calculate the damages here: how much would this woman's portfolio have lost if she retained her original allocation vs. how much did she lose in the 100% equity portfolio, plus attorney's fees.
Last edited by ddb on Wed May 20, 2009 3:31 pm, edited 1 time in total.
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Post by Mel Lindauer » Wed May 20, 2009 3:17 pm

I agree that it certainly doesn't sound frivolous. It may well turn into a class-action suit for other Lighthouse clients equally affected.
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Re: Lawsuits against Fisher Investments

Post by billern » Wed May 20, 2009 3:46 pm

ddb wrote:I wasn't too surprised to read this, because I've always heard that Ken Fisher has one model: 100% stocks. Still, to buy out an asset management firm and wholesale shift everybody into a 100% stock model definitely sounds lawsuit-worthy. Pretty easy to calculate the damages here: how much would this woman's portfolio have lost if she retained her original allocation vs. how much did she lose in the 100% equity portfolio, plus attorney's fees.
I have a negative view of the investment adviser world as I have seen quite a few poorly managed and just outright inappropriately managed portfolios. That said, I just can't agree with this idea.

Unless the account owner is either not able to make his/her own decisions or was not told about the changes being made, I don't think it is right to compensate them for 100% of their losses.

This client chose to stay with the asset management firm and allow them to change the portfolio composition. Would there have been a lawsuit if equities went up in value instead of down after the change? Would they have given back the gains since the portfolio wasn't appropriate for them given their situation? No, they would have kept the money.

They should have moved their investments elsewhere if they did not agree with the adviser. Since they didn't, they should chalk it up as a lesson learned and make sure they don't do it again.

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Post by Adrian Nenu » Wed May 20, 2009 4:13 pm

From the info in the article, looks to me like the firm gave bad advice and invested clients in unsuitable asset allocations given the clients' ages and risk tolerances. It should have at least reduced equity exposure as the market went down. It should have known about the inverted yield curve which predicted an imminent recession as early as late 2006. Knowing that risk was increasing, it should have DCA down and protected clients by moving the money into less risky investments. It collects fat fees so it should know this stuff and protect clients when the risk gets too high or at least get the asset allocations right for retirees if using buy & hold. It did neither.

Several years ago, Eric Haban, Mel Lindauer and I listened to Fisher's lecture at the Money Show in Orlando because he was scheduled before Jack Bogle. We were not impressed. He talked a lot but said nothing.

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Post by chaz » Wed May 20, 2009 5:56 pm

In any event, no matter the merits of the case, it's good for the lawyers - gives them something to do and keeps them off the streets.
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Post by matt » Wed May 20, 2009 10:33 pm

Obviously, this short article does not do justice to the full case histories, but if Fisher moved an investor from 41% equities to 100% because that's all he sells, then he has failed in his role as a fiduciary to this client and should be held liable. This probably does not even meet suitability standards, much less fiduciary.

Even if it is not the case that everyone gets 100% equities (I don't know if this true), then it still looks highly questionable to make such a large change in risk unless the investor had a reason to change strategies. New ownership by the investment firm is not one of those reasons.

billern, the role of an advisor is to do what is right for the client, even if the client doesn't understand what is right or wrong. People use advisors because they want advice and want someone to trust with their money. Smooth-talking salesmen can easily convince many people to make changes that are not in their best interest. They do not know enough to disagree. We all wish that these clients did know better, but they do not. The advisor should have known better and must take responsibility for his advice.

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Post by yobria » Wed May 20, 2009 11:49 pm

Upon the transfer of the trust’s investment account from Lighthouse to Fisher Investments, the asset allocation in the trust’s account was as follows: cash 27%, fixed income 32% and equities 41%,” the lawsuit states. “Fisher Investments recommended that [Ms. Ford] reallocate the trust’s portfolio to invest 100% in equities,” the suit states.


Good lord! Let's hope the judge or arbitration panel is financially savvy enough to understand how egregious this is. Of course, they probably won't be....

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Post by SP-diceman » Thu May 21, 2009 1:43 am

I received several emails from them.

They had a link you could go to and see
his quarterly reports. He was always bullish.
As the market went down he would say:"this
is the bottom". He would show lots of graphs
and economic charts to "prove" there was no
danger.

Then I saw him after the big sell off on
CNBC. He said: "the market decline caught
me by surprise".

Thanks
SP-diceman

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Post by Karl » Thu May 21, 2009 3:31 am

I don't know. Going with 100% stocks was only a recommendation and clients could have rejected the advice. I mean we're talking about investment advice here where there isn't some objectively right or wrong answer. It's not like 2+2=4 and 4 is the only correct answer to the question of what does that equal.

As one pointed out above, these clients would never have complained if stocks had continued to rise. They only complain when stocks fall and they want somebody to blame for their losses.

I'd say that 100% stocks is pretty bad advice, but then you're paying this guy to do what he thinks is best and he apparently thought 100% stocks was best and he was very clearly wrong. Can you sue an investment adviser for not being clairvoyant? What if he'd gone to 100% cash during a great bull market -- one wouldn't lose any money in that case, but could they then sue for the gains they failed to make?

And did you notice that pic of Ken Fisher looks a lot like Rick Ferri -- both have way too much ultra-thick hair for their age.

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Post by Fear and Loathing » Thu May 21, 2009 7:26 am

chaz wrote:In any event, no matter the merits of the case, it's good for the lawyers - gives them something to do and keeps them off the streets.


The lawsuit will be settled once all the money is gone.....

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Post by ddb » Thu May 21, 2009 7:57 am

Karl wrote:I don't know. Going with 100% stocks was only a recommendation and clients could have rejected the advice. I mean we're talking about investment advice here where there isn't some objectively right or wrong answer. It's not like 2+2=4 and 4 is the only correct answer to the question of what does that equal.

As one pointed out above, these clients would never have complained if stocks had continued to rise. They only complain when stocks fall and they want somebody to blame for their losses.

I'd say that 100% stocks is pretty bad advice, but then you're paying this guy to do what he thinks is best and he apparently thought 100% stocks was best and he was very clearly wrong. Can you sue an investment adviser for not being clairvoyant? What if he'd gone to 100% cash during a great bull market -- one wouldn't lose any money in that case, but could they then sue for the gains they failed to make?


I kind of disagree with those using the "buyer beware" idea with respect to the cited case. A Rigered Investment Advisor firm has fiduciary responsibility to its investors, which basically means that it must act in the best interests of the client. A simple two-minute conversation with the investor-in-question almost certainly would have ruled out 100% equities as suitable. It's pretty easy: "If your account were to lose 50% in value due to market performance, how would you feel and what would you do?"

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Post by BlueEars » Thu May 21, 2009 10:31 am

SP-diceman wrote:...
Then I saw him after the big sell off on
CNBC. He said: "the market decline caught
me by surprise".
...

Wasn't his first surprise. He made a call to get back into the market in May 2002 (see his Forbes article of that month) ... oops.

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Post by Gekko » Thu May 21, 2009 2:30 pm

"The Great Humiliator - The market is effectively a near living, near spiritual entity that exists for one goal and one goal only - to embarrass as many people as possible for as many dollars as possible for as long a time period as possible. And it is really effective at it. It wants to humiliate you, me and everyone else. It wants to humiliate Republicans and Democrats and Tories. It is an equal opportunity humiliator. Your goal is to engage The Great Humiliator without ending up humiliated by it." – Ken Fisher

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Post by Alex Frakt » Thu May 21, 2009 3:27 pm

Karl wrote:I don't know. Going with 100% stocks was only a recommendation and clients could have rejected the advice. I mean we're talking about investment advice here where there isn't some objectively right or wrong answer.

He's not a broker, he's an Investment Adviser (IA), which means he has a legal duty to put his clients into investments that are suitable for their particular situation.

For many investors, the whole point of hiring an Advisor is that the investor doesn't feel he or she has the ability to select appropriate investments. Without the existing legally enforceable requirement of the IA to give prudent advice, the designation would be meaningless.

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Post by ddb » Thu May 21, 2009 3:45 pm

I can't help but chuckle at this January 28th, 2008 article by Ken Fisher in Forbes Magazine. Among the highlights:

America should do well in 2008--better, at any rate, than people expect.

In my Jan. 29, 2007 column I predicted that the market (as measured by the Morgan Stanley World Index) would be up 10% to 40% for the year and that "the S&P 500 will be up, but by a lesser amount." The world was up a shy 9%.

Okay, so even in using a very wide prediction of 30 percentage points in your estimate, you were STILL wrong.
I'm still bullish. Why? The larger non-U.S. economy is doing great. America isn't doing badly. In each quarter we get a gross domestic product stronger than expected, followed by new expectations of terrible results for the next quarter.

Fear a Democrat this year? We've elected them many times before. And stocks were almost always positive then. I'm betting so for 2008, although foreign stocks could beat domestic ones.

Dead wrong on the prediction of foreign stock outperformance.
Nothing so severe is likely in 2008

Giant insurer AIG (57, AIG) is lower than it was one, three, five or even eight years ago--back when it sold for 40 times earnings. Now it is just 8 times earnings and 1.2 times annual revenue. But with an exceptionally strong presence in insurance and broader finance and slow but steady growth, [AIG] will enjoy a good run in the stock market in 2008.


So, his long US stock pick ended up being among the absolute worst, if not THE worse, performing stock in all of the S&P 500. This is quite an accomplishment. With ideas like this, I'd love to know how his clients performed in aggregate during 2008.

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Post by Specialized » Thu May 21, 2009 4:00 pm

ddb wrote:I can't help but chuckle at this January 28th, 2008 article by Ken Fisher in Forbes Magazine. Among the highlights:

America should do well in 2008--better, at any rate, than people expect.

In my Jan. 29, 2007 column I predicted that the market (as measured by the Morgan Stanley World Index) would be up 10% to 40% for the year and that "the S&P 500 will be up, but by a lesser amount." The world was up a shy 9%.

Okay, so even in using a very wide prediction of 30 percentage points in your estimate, you were STILL wrong.
I'm still bullish. Why? The larger non-U.S. economy is doing great. America isn't doing badly. In each quarter we get a gross domestic product stronger than expected, followed by new expectations of terrible results for the next quarter.


--political comment deleted--, although foreign stocks could beat domestic ones.

Dead wrong on the prediction of foreign stock outperformance.
Nothing so severe is likely in 2008

Giant insurer AIG (57, AIG) is lower than it was one, three, five or even eight years ago--back when it sold for 40 times earnings. Now it is just 8 times earnings and 1.2 times annual revenue. But with an exceptionally strong presence in insurance and broader finance and slow but steady growth, [AIG] will enjoy a good run in the stock market in 2008.


So, his long US stock pick ended up being among the absolute worst, if not THE worse, performing stock in all of the S&P 500. This is quite an accomplishment. With ideas like this, I'd love to know how his clients performed in aggregate during 2008.

- DDB


Ken Fisher is a permabull. Every column he writes in Forbes is basically the same thing: buy these particular individual stocks which are about to shoot through the roof, probably along with the rest of the stock market. It seems to work very well for him, as I believe he's in the Forbes 400. Apparently it doesn't work out quite so well for his clients.

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Logic and assumptions?

Post by BobL » Thu May 21, 2009 7:27 pm

DDB I don't follow your logic. I read that article too. It says Fisher's firm has over 37,000 clients. Out of so many to have 2 arbitrations is nothing. And from that article I dont' understand how you can say he shifted everyone to 100% stocks. You extrapolate that from one case. And you can't tell anything about the circumstances of that client or any of the other clients from what that article says. You've "heard" Fisher has one model? I don't think that's a good standard to make a statement of fact. It's just assumption. Also you say a "simple 2-minute conversation" would have ruled out 100% equities. Well, maybe they had a 2 minute converstaion. Maybe it was a 2 hour conversation. Maybe they talked for 2 hours every day. I don't know and you don't know. That's how it works with arbitration. We just don't know the facts and any comments about the suit is based on reading into things and conjecture. You know what they say about those who assume. :wink:

[Note: this poster appears to be a "sock puppet" and has been banned for violating the forum policy against posting from multiple identities - see my post in red below]

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Post by Karl » Thu May 21, 2009 7:58 pm

AIG had a stunning run in 2008 so he was right. It's just that the run was down hill, at a blazing speed.

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Post by Adrian Nenu » Fri May 22, 2009 6:10 am

Had Fisher explained the risk to his clients that they could lose 50% (or more) of their portfolios during a severe bear market, they would have never agreed to 100% equity. Not a single one of them. But clearly he did not explain the risk they were taking and they lost big money. As a professional, he had to know the risk.

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Post by gerrdog » Sun May 24, 2009 5:24 pm

Personally I think a lot of this sniping is off point. People here are complaining that Fisher got some stuff wrong. If you read him in Forbes you know he's been wrong this past year and admits to it. But isn't all this like heckling the batter with a .375 average because he gets 5 strikes in a row? No batter bats a thousand and the best batters strike out a lot and even a lot all in a row. Fisher still has a long-term average that beats the S&P and I know I wish I could be so wrong.

The standard for a good Boglehead is meeting the S&P. So why bash a guy for being down like the market was in 08 (especially when he still beats my passive portfolio)? If you're a Boglehead you'd get why its perfectly ok to be down big when the market is and why that doesn't hurt you in the long run. I'm content that I wouldn't do active well so I stick to passive for myself. But if you're going to do active you are going to be wrong a lot. No one can be only right and its unrealistic to expect someone to only be right. The challenge is being right more than wrong and that's what good active managers do.

If you don't like active management for yourself you don't have to do it. But it's childish to throw rocks at someone for using a strategy (and frankly being good at it, because I think we can all admit that some investors do active well) just because we personally wouldn't do it.

[Note: this poster appears to be a "sock puppet" and has been banned for violating the forum policy against posting from multiple identities - see my post in red below]

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Post by matt » Sun May 24, 2009 5:35 pm

gerrdog,
You have completely missed the point. With respect to the lawsuits being discussed, it does not matter whether the adviser uses active or passive management. The issue is whether the investors were put into portfolios that were too aggressive. It is about asset allocation, not active/passive strategy.

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The Fischer Firm is an RIA

Post by Gordon » Mon May 25, 2009 11:41 am

From my first experience with the firm they continously violate the rules for IRA's but are caredul not to leave potential clients with any paperwork that would be evidence of the fact.

Other diehards have reported clients with ages of 35 and 85 having identical portfolios.

The company executes theur trades through an affiliate and is careful to disclouse the fact but cleverly hides its impact.

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Post by markym » Tue May 26, 2009 11:20 pm

[Note: this poster appears to be a "sock puppet" and has been banned for violating the forum policy against posting from multiple identities - see my post in red below]

Hi there. I’m new to posting here but have been a long-time Boglehead blog reader (so please be gentle, I’m not in the habit of “blogging.) I’ve been an independent investing professional for two decades now and had to weigh in. I read that IN article and agree it’s not about active over passive, but nor is it about asset allocation. What its about is the law.

Other people commenting here assume that if someone’s 61, then they should only have one kind of portfolio but that is 100% wrong. The kind of asset allocation that gets recommended for a client is based on many factors. For example, I have a number of clients in that age range and they have a number of different allocations. I have a client near that age, and I only have about 10% of his total assets, but that 10% is 100% in stocks. For another close to that age I have basically 100% of his assets, but he doesn’t need the money and wants it to go to his grandkids, and that’s 100% stocks too. Another client might need some income now and again, and that is a different allocation.

But the thing about that article and this case is you can’t tell what the client’s situation is and the goals they have and what their total assets are from the article. It might very well have been appropriate for a client that age to have a portfolio be 100% stocks but its not up to you and me and your cousin to decide. It’s not even for the courts to decide, because what the court will decide on is whether the contract they signed was followed.

I know from reading other threads here what I have said will not make me popular, but them’s the facts.

One more thing for “Gordon.” I didn’t really understand his comment. From what I’ve seen and heard about Fisher, he doesn’t’ do trades through an affiliate. His clients deposit money through broker/dealers like Pershing, BofA, Citi, etc., which is how I do it for my clients (like I said, I’m independent). Fisher’s big, but I don’t think he owns Citigroup. I don’t know what “impact” Gordon was talking about that he cleverly hides, but my clients receive statements straight from their b/d. I couldn’t hide anything if I wanted to and no one can who has client money held at a big b/d. There’s nothing to hide because the b/d shows it all.

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Post by Ron » Wed May 27, 2009 8:38 am

markym wrote:Other people commenting here assume that if someone’s 61, then they should only have one kind of portfolio but that is 100% wrong.


Totally agree. My wife/me are both 61. I'm retired; she will be within the year.

Too often folks don't really look at what they have, nor their expectations for the future (retired or not). We all have different want's/needs, regardless if we are financially independent or not.

You must make the "correct decision" based upon your current life, and your expectations for the future.

- Ron

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Good Point Adrian

Post by Paul Puckett » Thu May 28, 2009 7:59 am

Adrian Nenu wrote:Had Fisher explained the risk to his clients that they could lose 50% (or more) of their portfolios during a severe bear market, they would have never agreed to 100% equity. Not a single one of them. But clearly he did not explain the risk they were taking and they lost big money. As a professional, he had to know the risk.

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Adrian, you'll be happy to know that, I tell my clients every time I meet with them, they can lose anything they invest in the stock market and that 50% in a given year should be expected. Inspite of that, most are above 50% equities, and they didn't yell at me last year. If more advisors had honest discussions about risk, the industry and the clients who want professional guidance would be much better off.

Somebody already addressed the fiduciary standard that an RIA is held to and if Fisher's firm didn't document the process that they were using and the agreement of the client, his firm and the E&O carrier will be paying a claim. In the Investment News article, Fisher was also quoted as saying, "Bring it on." "The claim is nonsense." "He's going to spend a lot of money and get nothing" and, this one is priceless, he wants to teach the client, "a lesson he won't forget". Glad I'm not representing Mr. Fisher.
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Re: Logic and assumptions?

Post by ddb » Thu May 28, 2009 8:39 am

BobL wrote:Out of so many to have 2 arbitrations is nothing.

How do you know how many arbitrations are pending against him?
And from that article I dont' understand how you can say he shifted everyone to 100% stocks. You extrapolate that from one case. And you can't tell anything about the circumstances of that client or any of the other clients from what that article says. You've "heard" Fisher has one model? I don't think that's a good standard to make a statement of fact.

I didn't make any statements of fact along those lines, and clearly stated that these are things I've "heard" (from several places, and actual clients of his, and having gone through his initial process as a prospective client).. However, if anybody has evidence to suggest that Fisher puts clients into anything other than 100% equities, I'd very much like to know about it.
We just don't know the facts and any comments about the suit is based on reading into things and conjecture. You know what they say about those who assume. :wink:

I realize all that. I'm going by what the article says, which is that he took an older woman who was 40% in equities and made her 100% in equities. Yes, perhaps 100% equities is suitable for her, but I'm going to go out on a limb and say that isn't true.

- DDB
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Post by Alex Frakt » Thu May 28, 2009 11:22 am

An IP address check reveals that gerrdog, markym, and BobL are all the same person. Apparently Fisher Investments has "sock puppets" looking for adverse information and attempting to muddy the waters. This is despicable behavior and suggests to me that great credence should be given to questions about their ethics and business practices.

The accounts in question have been deactivated and the IP address banned. However one of the fake user's posts came from a different IP address, so it appears they have the technical capability to avoid this ban. Because of this you should beware of any first time poster who chimes in on this thread with a pro-Fisher message.

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Post by ddb » Thu May 28, 2009 11:31 am

Alex Frakt wrote:An IP address check reveals that gerrdog, markym, and BobL are all the same person. Apparently Fisher Investments has "sock puppets" looking for adverse information and attempting to muddy the waters. This is despicable behavior and suggests to me that great credence should be given to questions about their ethics and business practices.


LOL - nice detective work.
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Post by Alex Frakt » Thu May 28, 2009 11:45 am

ddb wrote:LOL - nice detective work.


Thanks. BTW, while I was checking up on these posters, I ran across an earlier Fisher thread where we also had to remove posts from Fisher shills. It got so bad we locked thread. So this is clearly standard operating procedure for this outfit. My hope is that anyone doing a Google search on Fisher Investments and words like "complaint" or "scam" or "unethical business practices" will get a chance to read this thread.

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Post by HueyLD » Thu May 28, 2009 11:46 am

I made a mistake clicking on Ken Fisher's advertisement once and his firm spammed me repeatedly even after I told them not to. I had to finally block his company's site to get a relief. :evil:

Just another shark in the deep water waiting for the unsuspected investors.

The good monitoring by the moderators shines again. Thank you for making the Boglehead site as safe as possible.
Last edited by HueyLD on Thu May 28, 2009 1:26 pm, edited 1 time in total.

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Sock Puppet?

Post by Paul Puckett » Thu May 28, 2009 11:46 am

Nice catch, does your web hosting firm automatically catch those or did you figure it out manually?

I don't have anywhere near the traffic of the boglehead site, but I would love to know that I can catch something like that too!
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Re: Sock Puppet?

Post by Alex Frakt » Thu May 28, 2009 12:17 pm

Paul Puckett wrote:Nice catch, does your web hosting firm automatically catch those or did you figure it out manually?

I don't have anywhere near the traffic of the boglehead site, but I would love to know that I can catch something like that too!

We self-host from a secret bunker in New Jersey (really).

The forum software (phpbb) allows moderators and admins to see a user's IP address. It also shows what other IP addresses that poster has logged in from and if any other users have logged in from the same address. The IP stuff doesn't just appear, so something in the text of the message has to tip us off to go check it. In this case. markym's post seemed ...umm... unlikely, so I checked it.

BTW, your IP address is the numeric address assigned to your computer (or router) that allows stuff on the net to find its way to and from you. There's nothing dangerous about revealing your IP address. Since web servers must have a way to send information back to you, your IP address is given out every time you view a web page. It does not personally identify you, but will show who you get your internet access from and an approximate location. You can check your own ip address at sites like http://whatismyipaddress.com/.

For example, I'm posting this from 76.230.165.30. If you enter it in the site above, you'll be able to see I'm in Chicago and using a DSL line from "SBC Internet Services."

Paul Puckett
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Thanks

Post by Paul Puckett » Thu May 28, 2009 1:10 pm

Alex, thanks for the explanation of how it works. Sounds like something out of a Harrison Ford movie.

Incidentally, I'm pretty sure a similar Fisher post is on one of the forums at Morningstar, but I can't remember if it was in Vanguard Diehards or elsewhere. Don't know the protocol, but you may want to give them a heads up too.
Money is not your life. It is simply the means to the life that you want.

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Adrian Nenu
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Post by Adrian Nenu » Thu May 28, 2009 1:20 pm

In the Investment News article, Fisher was also quoted as saying, "Bring it on." "The claim is nonsense." "He's going to spend a lot of money and get nothing" and, this one is priceless, he wants to teach the client, "a lesson he won't forget". Glad I'm not representing Mr. Fisher.


Thanks Paul. Fisher gave himself some bad PR by making these statements. Investors are more likely to avoid him because he cannot admit he made mistakes and has promised to take aggressive action against former clients. He should have let his lawyers diplomatically state that he believes that he acted in his clients best interests or something to that effect.

Like I said before, I have seen Fisher at the Money Show in Orlando and other places and was not impressed with his presentations. But I never thought he'd shoot himself in the foot with such comments.

Adrian
anenu@tampabay.rr.com

brainstem
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Post by brainstem » Fri May 29, 2009 7:43 am

One thing that mystifies me is his continued presence in Forbes -- all of his aggressive marketing and issues with clients results in lessening the brand value of Forbes for legitimizing his "expertise".

Paul Puckett
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Post by Paul Puckett » Fri May 29, 2009 8:20 am

Adrian Nenu wrote:
Like I said before, I have seen Fisher at the Money Show in Orlando and other places and was not impressed with his presentations. But I never thought he'd shoot himself in the foot with such comments.

Adrian
anenu@tampabay.rr.com


I never knew much about him, except that he sends more email and snail mail solicitations than any firm of any kind, at least to my address. Admired how he grew his company, maybe the ego grew with it? He didn't do himself any favors with those comments.

My personal opinion is that if you are comfortable investing without an advisor, particularly if you follow Bogle, then you will be fine. When people aren't comfortable and want an advisor, they need to recognize how many different configurations of financial professionals exist (brokers, RIA's, CPA's. attorney's, family offices, etc.) and determine the configuration that suits their needs, and finally be willing to conduct a time consuming screen to make sure that your choice is worthy of the cost.

I think Fisher got to big and served clients that were too far away. I won't make a blanket statement against using advisors that aren't local, because people like Rick Ferri demonstrate by their fee schedule and investment discipline, that it is possible to be a fiduciary at a distance. Not pushing Rick, just making an observation.

Thanks, Adrian

BTW - I grew up between Orlando and Tampa. Great part of the country, but a bit hot for me even though I'm a native!
Money is not your life. It is simply the means to the life that you want.

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stockpickerted
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Constant Barrage of Phone Calls and Mailings

Post by stockpickerted » Fri May 29, 2009 9:00 am

Once you are on his mailing list you are his 'friend' for life. That said, every person needs to know how their money is being invested. Ignorance is no excuse, if you don't understand the strategy, put your money in CD's or something else totally safe. If, however, the advisor makes inappropriate decisions they may have some liability but just because you lose money doesn't mean that someone else is to blame.

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Fisher

Post by sperry8 » Sat May 30, 2009 4:44 pm

I cant speak to the lawsuit, but I have used Fisher as a client since June 2008. I pay 1.25% for the privilege. Since inception (Jun 08) he has underperformed his benchmark by a significant amount (>2%) before subtracting the 1.25% in expenses. My portfolio has also trailed its benchmark (I manage the remainder of my portfolio solo) by bout the same 2% (just a shade less), but of course, I dont charge myself 1.25% per year. I dont find Fisher to be shady, but he certainly is a salesman. His firm constantly tries to get me to commit more money to them and to try to show differing time periods that I should consider (e,g., my rep said they beat the benchmark in q1... they are on track, isnt that nice?). I said I could care less about 1q, i care about you losing since inception (its been almost 11 mos and so far you cant beat the benchmark (FTSE All World). Anyway, overall Ive been disappointed with their service although I will say Ken is very responsive personally (he has emailed me directly to respond to questions, even though Im a small drop in his overall bucket of managed fees). Still - his personal responses and the fact that he seems to care about his clients dont overcome the fact that his firm has not come close to beating the benchmark in 11 mos with his firm. I will probably give them through the end of 09 before deciding whether to proceed or discontinue.
Last edited by sperry8 on Fri Nov 27, 2015 11:30 pm, edited 1 time in total.
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ddb
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Re: Fisher

Post by ddb » Mon Jun 01, 2009 7:43 am

sperry8 wrote:I cant speak to the lawsuit, but I have used Fisher as a client since June 2008. I pay 1.25% for the privilege. Since inception (Jun 08) he has underperformed his benchmark by a significant amount (>2%) before subtracting the 1.25% in expenses. My portfolio has also trailed its benchmark (I manage the remainder of my portfolio solo) by bout the same 2% (just a shade less), but of course, I dont charge myself 1.25% per year. I dont find Fisher to be shady, but he certainly is a salesman. His firm constantly tries to get me to commit more money to them and to try to show differing time periods that I should consider (e,g., my rep said they beat the benchmark in q1... they are on track, isnt that nice?). I said I could care less about 1q, i care about you losing since inception (its been almost 11 mos and so far you cant beat the benchmark (FTSE All World). Anyway, overall Ive been disappointed with their service although I will say Ken is very responsive personally (he has emailed me directly to respond to questions, even though Im a small drop in his overall bucket of managed fees). Still - his personal responses and the fact that he seems to care about his clients dont overcome the fact that his firm has not come close to beating the benchmark in 11 mos with his firm. I will probably give them through the end of 09 before deciding whether to proceed or discontinue.


Shane:

Out of curiosity, what led you to invest money with his firm in the first place? Was there something in particular which led you to believe they have a good shot at beating their benchmark?

Thanks!
DDB
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Post by renter » Fri Jul 03, 2009 12:50 am

I was reading Forbes.com online this evening and perused Ken Fisher's second June 2009 column. He warned "...There's a lot of mischief and manipulation on the Internet, masquerading as fact or as casual commentary. Beware." I chuckled, remembering the post below.

Alex Frakt wrote:An IP address check reveals that gerrdog, markym, and BobL are all the same person. Apparently Fisher Investments has "sock puppets" looking for adverse information and attempting to muddy the waters. This is despicable behavior and suggests to me that great credence should be given to questions about their ethics and business practices.

The accounts in question have been deactivated and the IP address banned. However one of the fake user's posts came from a different IP address, so it appears they have the technical capability to avoid this ban. Because of this you should beware of any first time poster who chimes in on this thread with a pro-Fisher message.

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Re: Lawsuits against Fisher Investments

Post by CedarWaxWing » Sun Jul 26, 2015 11:45 pm

Well... an interesting series of posts... I recently sent a few books on index funds to an 80 and 70 year old married couple.. two friends of mine. They asked me to help them learn about how to invest in mutual funds... and then told me that FI had a sales person (which is what they are... not really people with sig expertise)... had convinced them that an annuity they had was a really bad investment.

FI also offered to then pay the fees to get out of the annuity... but the couple had to promise to leave the money in the hands of FI for at least 5 years... for at LEAST 1.5% ... but with transaction fees, and who knows what else.. I expect it is at least 2%. IF they take their funds out...they will be penalized.

This is not what a fiduciary does... this is what a sales person does...

This really and truly should be illegal... and KF should be embarrassed to show himself in public. BTW... his "office" site in Camas, Washington... is guarded by a gate and a sentry... who lets no one in without an appt. Is this due to the fear of an unhappy customer showing up unexpectedly? Why would they need a sentry at the gate with a very long driveway.. ?

Something is very very wrong here...

M.

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unclescrooge
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Re:

Post by unclescrooge » Sun Jul 26, 2015 11:52 pm

Karl wrote:I don't know. Going with 100% stocks was only a recommendation and clients could have rejected the advice. I mean we're talking about investment advice here where there isn't some objectively right or wrong answer. It's not like 2+2=4 and 4 is the only correct answer to the question of what does that equal.

As one pointed out above, these clients would never have complained if stocks had continued to rise. They only complain when stocks fall and they want somebody to blame for their losses.

I'd say that 100% stocks is pretty bad advice, but then you're paying this guy to do what he thinks is best and he apparently thought 100% stocks was best and he was very clearly wrong. Can you sue an investment adviser for not being clairvoyant? What if he'd gone to 100% cash during a great bull market -- one wouldn't lose any money in that case, but could they then sue for the gains they failed to make?

And did you notice that pic of Ken Fisher looks a lot like Rick Ferri -- both have way too much ultra-thick hair for their age.


I disagree. People hire RIA firms because they need someone to make these decisions for them.

Sounds like the fiduciary duty was not upheld, based on the article.

staythecourse
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Re: Re:

Post by staythecourse » Wed Sep 13, 2017 11:37 am

unclescrooge wrote:
Sun Jul 26, 2015 11:52 pm
Karl wrote:I don't know. Going with 100% stocks was only a recommendation and clients could have rejected the advice. I mean we're talking about investment advice here where there isn't some objectively right or wrong answer. It's not like 2+2=4 and 4 is the only correct answer to the question of what does that equal.

As one pointed out above, these clients would never have complained if stocks had continued to rise. They only complain when stocks fall and they want somebody to blame for their losses.

I'd say that 100% stocks is pretty bad advice, but then you're paying this guy to do what he thinks is best and he apparently thought 100% stocks was best and he was very clearly wrong. Can you sue an investment adviser for not being clairvoyant? What if he'd gone to 100% cash during a great bull market -- one wouldn't lose any money in that case, but could they then sue for the gains they failed to make?

And did you notice that pic of Ken Fisher looks a lot like Rick Ferri -- both have way too much ultra-thick hair for their age.
I disagree. People hire RIA firms because they need someone to make these decisions for them.

Sounds like the fiduciary duty was not upheld, based on the article.
Apologize in advance as I did not read past comments. I think the issue will be, as it is in medicine, is the "norm" upheld. Meaning would other RIA in the same area advice the same thing to the same style client (monthly income needs, age, life expectency, bequest wishes ,etc...).

The obvious question that would be asked of the plaintiff at the time of trial would be, "Maam would you bring this lawsuit if stocks went up 50% and your net worth was now worth 50% more?" That will be hard for her to answer and NOT sound like sour grapes.

In the end, if she agreed to the plan then it will be hard to argue considering she is competent. If this is a trust and she the trustee has no power in the trust documents to change the investment adviser then it is more understandable.

Either way the INTERESTING thing to take home has nothing to do with the lawsuit, but a reminder to all if a corporate investment adviser is chosen to manage the money make sure the trustee can change the adviser at any time if they see fit.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

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Re: Lawsuits against Fisher Investments

Post by JBTX » Wed Sep 13, 2017 1:45 pm

Decades ago I used to get Forbes magazine, and he was a regular contributor. My recollection was he was pretty much a "perma-bull".

In general, such a stance has probably served him well, except for some large hiccups 2000 and 2008. However putting a trust fund in 100% stocks seems pretty irresponsible.

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