Someone Didn't Meet Investment Banking Thresholds In San Francisco

Investment banking is a fast-paced, high-powered business. Deal flow drives egos, reputations, and compensation. Bankers place large amounts of capital into circulation. The bigger the deal, the harder they work. They do not waste time with small deals. That is why it is so hard to believe some San Francisco blowhards who have claimed in my presence that their small-time reputations came from really big deals.

The Dummies book series describes the revenue threshold separating investment banks from business brokers. Small businesses don't need the specialized services of expensive investment bankers when they are better off finding a generalist intermediary. Most entrepreneurs who have bought or sold a small business figure this out on their own. Hilarity ensues when someone who has never owned a business tries to claim they know how this works.

I met the biggest lying phony of a lifetime a few years ago in American Legion Post 911 in San Francisco. The Legion took forever to shut that phony Post down but its sad legacy lives on in the denials of its former prime movers. The lying phony once claimed on Yelp that he had hired Goldman Sachs to sell his unspecified business, which of course never existed. Try getting a Goldman banker on the phone for any deal worth less than $100M or so and you'll be lucky if they don't just bust out laughing. Maybe a young top-shelf i-banker would take a deal under that threshold if they were totally stupid, or if they worked for a managing director who wanted to force them out for lack or revenue.

Another pathological liar crossed my path around 2012 through some investor relations events that I no longer attend. The guy's claimed record of bulge bracket deals in remote islands made no sense, especially after he started promoting penny stocks. That's a step down in prestige and income from globetrotting i-banking. His further connections to "deals" with companies having no verifiable revenue or visible operations made me shake my head. I can't be around people with such bizarre notions of successful deal-making.

Glib talk about deal thresholds can fool a lot of otherwise intelligent people. It doesn't fool me. I just love studying financial minutiae. Red flags fly fast and furious when someone within earshot brags about closing deals that can't be verified with simple sleuthing. The SEC doesn't always pursue small-fry liars like the Legion Post 911 idiot or the island-hopper. I enjoy picking up the trail where regulators leave off.

The Haiku of Finance for 12/07/15

China baloney
Currency of corruption
Yuan fits regime

The Haiku of Finance for 06/25/15

Slick pitch presenter
Prey on gullible clients
Run mouth to grab cash

The Strange Confluence of Cash Flow, Real Estate, and Maybe Even Futures

I am really curious about a whole bunch of financial concepts.  I get even more curious when one or more purveyors of proprietary strategies join up in a marketing maelstrom.  Let's explore a recent confluence of several practitioners.

Go ahead and try to locate a source for someone named Dahl Downing and something called Cash-Flow Strategies.  Google Search results gave me absolutely nothing.  There is nothing morally or legally objectionable about squeezing every last cent of wealth enhancement into an IRA.  I also do not object to flipping income-producing properties or participating in tax deed auctions provided the players involved know what they're doing.  I just cannot understand doing these things without referencing a credentialed expert source or appropriate legal guidelines.  It takes a lot more than having an "invested IQ" to pull these things off.  It also takes more than a couple of slap-dash Web portals that warrant a Google warning about hackers.

Background homework on the stars of Flipping Vegas is just as entertaining as one could imagine.  Perhaps a computer algorithm or a paid gaggle of trolls have published a large number of negative comments all over the Web.  Anything is possible.  It is also possible that a lot of consumers with real complaints just need to vent their opinions.  Contracting out a presentation to pitch an abundance of education probably won't help matters.

There are better ways to spend time than chasing wild rabbits into dark holes.  I elected not to waste one of my weekend mornings listening to slick seminars on real estate.  I did not need to find out whether cash flow or futures were also on the agenda once I saw a whole bunch of shabbily dressed people milling about a hotel lobby waiting to register.  I really am better off on my own, thank you very much.

The Haiku of Finance for 01/28/15

Huckster baloney
Mass pitch event for suckers
Picking some pockets

Dog-Gone Pitch Strikes Again With Real Estate Private Pre-Auction Baloney

My faithful readers may be familiar with my contempt for some dog-gone hucksters and their perpetual real estate seminars.  I blogged about this stuff almost five years ago.  Some organization obviously read my review of the seminar shortly after I published it and disliked it enough to have a flunkie respond.  They never bothered to remove my name from their mailing list.  So many employees are even dumber than I had estimated.

The result of someone's administrative oversight still arrive in my mailbox to this day.  I sometimes receive special invitations to attend a "private pre-auction real estate event" at hotels in San Francisco.  The group upgrades the venue sometimes, getting away from the airport hotels for more touristy spots.  The fold-out postcard always promises introductions to dealmakers hand-selected by a guru himself.  If they're anything like the hand-selected bums and losers I met at the original free seminar, the quality of their deals is likely to be zero.

Serious real estate investors can find real deals at local real estate clubs.  Your local bank can give you a heads up on any foreclosed properties from their REO portfolio they want to unload quickly.  Don't even bother hanging out with the bottom-feeders and shills that are likely to populate a mass-pitched event.

Reprising a Real Estate Festival of Baloney

This is a repost of an article I originally published in April 2010.  I took it down when the people I exposed threatened me with a lawsuit, and I did not wish to fight some deep pocketed operation in court.  I have since removed all references to this person's enterprise and to other real people who were connected to this promotion.

I love free stuff but hate wasting time.  Today I came up FAIL on both counts.

I was recently cold-called by some real estate seminar promoters.  These people probably got my phone number from the usual lists.  They were pitching a free seminar that I knew would be a tease for some huge rip-off.  This free seminar came with a twist:  A free book and digital camera, plus an appearance by a TV business personality, were part of the deal.

Who's the TV personality?  He won the first season of a reality TV competition and spent a couple of years under contract with the network as a shill for a blowhard real estate developer and his charities.  Now he's married to another entertainment talking head, completing his transformation from legitimate entrepreneur into soulless media package.

I wanted the free stuff, so I said yes, plus I really needed to amuse myself.  A week later their call center followed up by pitching me a "VIP seating" package that I politely turned down.  No way was I paying one stinking penny for what I consider to be free entertainment.  I hadn't even walked in the door and they were already trying to find a way to get my money.  They later sent me a confirmation email stating that the TV personality would appear by "remote linkup," and the real presenter was someone else.  Boy, was I in for a treat.

The momentous day of the seminar was today (actually, it was a day in April 2010, but remember this is a repost) at an airport hotel near San Francisco.  This particular hotel has been the scene of a few other free seminars I've attended, with the likes of two other shills pitching their garbage.

Who's one of those shills?  He's a self-promoting personal improvement guru whose amateurish sweat lodge retreat caused the deaths of three participants in October 2009.  His company can't pay any legal claims because it spent every penny customers had prepaid for future events that are now cancelled.  Brilliant!

Who's the other shill?  You know him as the author of one series of books about a rich parent who probably never existed.  I'll let you read what others say about the person's real estate knowledge so you don't waste your own time or money.

The time I spent waiting for the registration table to open gave me some entertainment.  A disheveled man carrying a ratty bookbag and wearing a shirt that looked like it hadn't been changed since 1979 asked me if this was the right place for the seminar.  I said yes, but I didn't want to break his heart by breaking the news that the TV celebrity would only be present electronically.  "My relatives all think I'm crazy for coming here," he said.  I wasn't about to argue with him.  During the seminar he actually started talking to himself.  I guess I didn't have to argue with him at all, since he was doing it for me.

I sat in the back of the seminar room because I suspected I might be making a quick exit, free stuff or not.  I asked one of the speaker-dudes if I could get my free digital camera now.  Unsurprisingly, he said "No, I have some things to teach you first."  Some young chick I crossed paths with asked me if we were supposed to do anything with the registration letter we got in the mail.  She chuckled when I said, "Of course not."  The suckers who were dumb enough to pay for VIP seating were sitting up in the front two rows, sectioned off with . . . wait for it . . . masking tape.  There were at least eleven of these idiots up there, soon to be separated from more of their money by the shysters running this carnival.

The guy next to me admitted he only wanted the free camera too.  "I have to get my wife a birthday present, and this looked like the best way since I'm unemployed and have no savings."  Wow.  I was mentally going through the items I remembered from a publicly available Real Estate Artist B.S. Checklist and all of the signs were appearing as predicted.  The audience members were all definitely the dregs of society, sloppily dressed and ugly.  Two guys even came wearing slippers.

The main event started.  The TV personality appeared all right, not via "remote linkup," but by a digital recording that looked like it had been edited from a Skype session.  He gave a generic introduction that mentioned no target audience, so it was obviously designed to be used repeatedly on the road.  I honestly believe that most of the people in the room were dumb enough to think he was speaking to them live.  Mr. TV Dude, I'll tell you right now, being associated with this promotional scheme is going to come back to haunt you when the whole thing collapses from lawsuits.

The main pitchman leading off was some guy I had never seen before.  He's pitched similar seminars for the blowhard real estate developer; the TV personality's recorded intro mentioned him as a former blowhard associate and triathlete.  I only knew him as the guy who told me I had to "learn something from him" to get a free camera at the end.  Both learning something and getting that free camera were looking increasingly unlikely.

The first 30 minutes of the seminar told me everything I needed to know about what the promoters thought of their audience's intelligence.  More signs from the B.S. checklist appeared.  The pitchman dropped hints at a luxurious lifestyle by showing pics of a huge development he claimed to have some part in finishing.  The rubes in the VIP seats must have been suitably impressed.

I decided to leave after two slides insulted my intelligence.  The first was a chart that looked like a standard distribution of real estate foreclosures.  The obvious problem (to my MBA-trained mind anyway) was that the timeline on the graph ran from 2007-2012 but a box imposed on the chart - split down the middle - said the bulge of foreclosures would be 2010-2011.  In other words, a two-year timeline was symmetrically imposed on a six-year timeline even though they both had different midpoints.  It was also a perfectly symmetrical distribution, which for a timeline makes no sense at all.  The statistically illiterate people in the audience probably missed that one.

The next insult was too much to bear.  The platform pitchman said that banks don't like holding foreclosed properties because they don't want to manage real estate.  Fair enough.  Then he said this whopper:  "When the bank forecloses on a mortgaged property, it's no longer an asset for the bank.  It becomes a LIABILITY."  That's complete BALONEY.  A home owned by a bank is still an asset; it's just not producing any income, from mortgages, rents, or otherwise.  It does not move from one column of a balance sheet to another, although it does change asset categories and can be written down in value significantly.  Analysts like yours truly know this; idiots and suckers wearing slippers to seminars will never know it.

I couldn't take any more.  I left after exactly 40 minutes of this circus.  I wasn't going to wait around for another six hours in the hope of getting the TV personality's free book, some free digital camera that was probably junk, and whatever free lunch they mentioned.  It was probably going to be a baloney sandwich.  I'd had my fill of free baloney for the day.

I hope you all enjoyed this blast from the past.  It's almost five years old and I still think it's funny.  All that I have read about this particular real estate promotion since I wrote this article in April 2010 convinces me that they have not changed their ways.  I will not name names because I don't need a reprise of the legal liability they threatened to throw at me a few years ago.  The reprise of the article, stripped of identifying information, is enough.  

The Limerick of Finance for 02/10/13

The analyst strives to impress

Write "bull" reports under duress

Companies expect lies

Best to leave and cut ties

Pumping bad stocks is not worth the stress

The Haiku of Finance for 09/22/10

Recession over?
So says the NBER
I don't believe it