Another scam: Aquilaria Tree Scheme

The Aquilaria Tree Scheme

I read Straits Times today and saw this news:

Link: http://www.straitstimes.com/business/investors-cry-foul-over-tree-investments-gone-wrong

The "deal" in summary:
Pay $230 per sapling or $550 per semi-mature tree
Tenure: 6-7 years when tree matures
Returns: 6-7 times when Agarwood is harvested from each tree
What does this mean: 100% returns averaged out in 1 yr.

In 2013, my friend proudly told me her investment in this Aquilaria Tree. She said that she bought a few trees and when these trees matures, it produces Agarwood which can be sold. She can sell at $400-$600 for each tola of Agarwood oil harvested.

I told her then that this was very likely a scam. How can there be such a good deal? $400 return after 6 yrs when the investment is only $500?

SURE ANOT? 100% return?

She told me that she was very sure. The investors even told her they could bring her to see the actual trees planted. Furthermore, it was a Singapore based company.

Hai.. so now this Singapore company has folded and gone MIA. Hard earned money of my friend all gone..

Previously, I have written a post about Pre-IPO Scams, link here.

How to identify potential investment scams:

1. It promises high returns with a very low risk.
What is high return?

Returns through various investments:
0.025%  savings account
1.3%  1-year FD
3.25% OCBC 360 Account
7.8%  S&P 500
15% Warren Buffet
Warren Buffet, one of the richest person on Earth, returns from the stock market is about 15%.  Do you honestly think that you can get an investment that yields a higher return than Buffet consistently and at a low risk?

2. You are enticed through telemarketing
A good investment will be secretly kept in wraps and for traders/big investors to earn. Heck, if I can earn via arbitrage or if I know a very good investment, I will keep it a secret and profit hugely myself.

If a good investment has to be promoted through telemarketing, it is just desperate.

Lastly, some lessons to learn:

1. 'Alternative Investments' such as venture capital, private equity, hedge funds, real estate investment trusts, commodities as,precious metals, rare coins, wine, and art are normally directly sold to people with high net worth. You may  a private banker from a known bank helping you to invest in such things.
Such a creative idea... Aquilaria Tree and agarwood lol.

2. Read more and understand better before investing.  You should be sure of what you are buying, please read more and please read from expert reports. If you do not know anything, at least GOOGLE.

3. If you cannot resist the temptation to make money quickly and easily, you are bound to lose money.  I have written a post here . There is no easy and quick money in the world la alamak. Warren buffet reads 8 hours a day and is innately talented, and his returns are 15%.

Ok, that's all from me in this matter. :)

Pre-IPO stock options- Scam anot?

Sigh.. Recently, my friend told me that he bought a Pre-IPO stock in Singapore and he is convinced by the person talking in the seminar that he can earn a few times over. He says he trusts his friend who took him in and the institution.

Wow. seriously amazing. That's like 200%? 300%? 400%?

Meanwhile, these are the average returns of all other investments:
0.025%  savings account
1.3%  1-year FD
3.25% OCBC 360 Account
7.8%  S&P 500
15% Warren Buffet

Gua gua....

I have no idea what this Pre-IPO is about, what the seminar is about, who the person selling is so I can't say anything much.

BUT

1. Are you worth millions?
Sorry, if you are not worth millions I don't think you can get a pie of the Pre-IPO stock. Pre-IPOs are normally allocated to investment banks who are the underwriters and have lots of money. Unless you are the favorites of the investment banks (which means you are very very rich), you would perhaps be given a pie. Most people don't even have the connection to these investment banks.

2. Unpopular stock
I think it is very laughable when a company needs to set up a seminar to convince people to buy its Pre-IPO shares. Lol can you imagine Alibaba doing that last time? Do they need to? Or Facebook or twitter doing that? If they need to set up a seminar to convince people to buy, then sorry, it is probably a very lousy stock.

3. Too good to be true
High risk comes with high returns. Most investment vehicles can only have the average returns of at most 8% or a little higher if you are very good at it. It is very difficult and very unlikely to have abnormal returns consistently, like seriously can people use their brains to think????

Sigh. There have been so many investment scams being reported but why do people keeping falling and falling for them over and over again?

4. IPO may never materialize
There is no guarantee that the company will make it to the actual IPO or the actual price.

That's my input for this Pre-IPO don't know scam or not scam. I say, please, if you do not know what to invest or how to invest, I think it will be better if you just put your $ inside the ocbc 360 account.

Meanwhile, if any readers knows about this Pre-IPO thing, do enlighten me.

Thank you~