What is New in Family Farming?
Apparently, breeding pigeons - or so says Arlan Galbraith, the man behind the Pigeon King International scheme.
In an interview with CBC, Arlan Galbraith claims to be able to save the family farm - with pigeon breeding.
In essence, Arlan will sell you now, for $500.00,
the right to make a sale of pigeons to PKI in the future for anywhere between $8.00 and $50.00 per bird, birds which are the offspring from the original pair of pigeons you obtained when you paid your $500.00
So, if you pay Arlan $500.00 today, you might in the future get back between $8 and $50, the current "price" is $18.00, from Arlan on a periodic basis.
What do you think that the rate of return on this investment is? Think hard, there will be a test at the end of this article.
Dave Thornton, the President of Crime Busters Now, asked me to review Arlan's scheme. I will be preparing a private advisory opinion for Mr. Thornton, but I thought I would share some highlights of the my report with you.
There has been concern that Arlan is misleading his pigeon investors. From the Vancouver Sun's article on Pigeon King International, we learn:
"A Canadian businessman behind a multi-million-dollar network of pigeon farms across North America -- his empire fuelled by predictions of a post-chicken world ruled by squab -- is under investigation after the State of Iowa issued an alert to potential investors that Pigeon King International may be a Ponzi scam."
But Arlan replies:
"Pigeon King president Arlan Galbraith defends his enterprise, insisting Iowa authorities have been misled by critics blinded by "jealousy and envy" over his firm's rise to riches.
Praising the pigeon's growth rate -- "They multiply their weight 60 times in 28 days" -- Galbraith added "pigeons don't get avian flu and they don't spread it."
And what were those Iowa Authorities saying about Arlan's scheme?
"We have been asked about the validity and legality of solicitations for major investments in pigeon-breeding operations. We are investigating this matter.
We believe that potential investors/buyers should be very cautious and examine the situation very carefully -- especially the question of whether there is a realistic and independent market for pigeons now and in the future.
Pigeon King International, Inc., based in Waterloo, Ontario, invites investors/buyers to invest as much as $50,000 to $100,000 or more to buy hundreds of pigeon breeding pairs.
The Farm Division of the Iowa Attorney General's Office has issued a formal "Civil Investigative Demand" or CID to Pigeon King International, Inc., and Arlan Galbraith, President and CEO of the company. The CID, which was issued in November, asks Pigeon King and Galbraith to provide various detailed information about their operation and plans for the future."
So, how should an investor "examine the situation very carefully"?
And why does it matter that "there is a realistic and independent market for pigeons (the bird kind) now and in the future?
Remember, the question I asked: what is the rate of return on Arlan's scheme? What was your answer? 50%, 25% or 18%?
The correct answer is: you don't know.
If there is no independent market for pigeons, or at least Arlan's pigeons, then the money you are receiving is simply a return of your own capital. Which by definition is "is not a gain of any type because it is not in excess of the original investment."
In a previous post, on the recent Randall Joseph Ponzi scheme, the U.S Attorney, Stephen J. Murphy, investigating the case stated:
"Even sophisticated business people can be deceived by an attractive Ponzi scheme, because at first, the returns look like the real thing".
Although federal investigators are well-equipped to unravel such schemes, Investors need to be on their guard against these schemes as the first line of defense."
There is the cold hard reality: the ordinary investor does not have access to the investigation tools to unravel a ponzi scheme: to sort out the difference between a return of capital and a return of real income.
So how can you be on guard, as an ordinary investor? Tomorrow, we will talk about two techniques: listening to the gut, and hearing what the shills are really saying.
Related posts: Why Being a Sucker Seems So Right and Pigeon King and Testimonials.
