Oct 4 2012, 02:51 PM
Genneva Gold incident is a good lesson learnt for public. I have read many comments and feedbacks by the investors, agents and street public. I realized that generally most of people are lacking the truth knowledge of business and investment. If all these people know the knowledge as good as simple school math's like 1+1=2, this incident never could happen.
The raid is definitely a right move by the respective authorities. They are executing their duty and responsibility which are to prevent the suspicious business from becoming disaster.
As pointed out by many "clear mind" people, the return by Genneva Gold is too good to be truth. The offer is really too good and not easy to resist. It has crossed over the boundary of any ordinary investment plan in term of guaranteed return. A news in Sin Chiew this week was reporting that China's steel entrepreneur complained their earning of selling one ton steel is just equivalent to a simple dinner dish. Could you imagine the challenging in business world to make a profit of more than 10% a year. If you still believe that depositing a sum by earning 25% annually with guarantee is a possible investment plan for long term, I suggest, you need to read more about investsment. Otherwise, you make these entrepreneurs and Warren Buffett look stupid.
There are some defenders, mostly investors or agents, repeatedly saying the company has not in default to any investors since the business operates few years ago. This statement proves that these people are seriously lacking of common sense in investment and business. It is just simple as it is - the problem exists but not yet mature for surface. It takes time. But, it is absolutely sure, the problem definitely surfaces later or sooner. The action from the authorities is to prevent the problem grows too big when it bursts. Otherwise, you can think of the victims are not 60,000 investors, it could go to million investors, if the authorities do not send the clear message to the public. By then, these huge crowd investors would press the government for rescue plan. The plan is basically spending tax payers' money to recover their losses. This is absolutely unfair to all the tax payers. The money is not for rescuing their greedy and wrong investment.
From the facts that I gathered from the media, basically, Genneva Gold is not a pure gold trading company. It is a money game scheme as it introduces buy back and "hibah" . The game can goes on and on until one day the balance sheet is unbalanced for repayment. This happens when the gold price fluctuates too high and the market is saturated from new investments by exiting investors or new investors.
I always like to think of the popular money game - the pyramid. The game sells no product except member fee. Let say, a member enrolls by paying RM1,000. He introduces 5 members by getting bonus of RM1,500. He makes profit of RM500 happily. His bottom line members do the same. This pyramid is spreading widely. The company has no problem of paying as their collection is more than payout. But, one day, new members counts are insufficient to sustain the payment, the pyramid is collapsed.
This explains Genneva Gold is still able to fulfill their payout promises as of the raid. However, the hidden is that the risk of payment default grows day by day as well. It is like blowing a balloon without stopping. The balloon is definitely burst.
If the blowing balloon can go indefinitely, all the business and investment theories and concepts have to be re-written again. All the professors in Harvard school have to be re-trained their expertise.
GENNEVA MALAYSIA, some facts.., READ and UNDERSTAND
Quote
]
0.0620sec
0.23
7 queries
GZIP Disabled