Social Proof and Kirk S Wright
Apparently, Mr. Wright while not hiding, is available by cell phone, giving instructions to his lawyer and conducting interviews with the Wall Street Journal. The article claims:
Some of Atlanta's African-American business leaders express anger that the city's biggest black-owned hedge fund may have taken advantage of the city's black professionals to gain legitimacy early on, letting the fund build a broad client base later. "In all candor, what he did was say, 'I can wine and dine African-Americans who are not sophisticated in the investment field and get their money,' " says Reuben R. McDaniel III, the African-American co-chairman and president of Jackson Securities Inc., an investment bank founded by former Atlanta Mayor Maynard H. Jackson, who died in 2003. (my emphasis)
Although the WSJ lists the usual red flag suspects available in hindsight, "unusually consistent high returns, vague descriptions of investment strategies, aggressive marketing, no auditing, and secretive behavior by the manager", these red flags could describe any successful hedge fund. Why are these red flags available only the fund has collapsed?
There is an accompanying video which is well worth watching. One of the new anchor suggests to the Wall Street Journal reporter that of course 27% returns in the last couple of year is a huge red flag. Implying only fools could believe in such increases. Really? Do you think that news anchor knew what Berkshire B's return from 2003 to 2005? Care to guess?
