Investors started worrying about their investment with Robert Markman’s Markman Capital soon after he committed suicide on Feburary 19 of this year.The documents Robert Markman used to peddle his fund, Markman Capital, to investors (embedded below) and his bizarre personal statement weren’t enough to warn them until it was too late.
Bruce Primeau, an adviser and vice president of Wade Financial Group, told Investment News in March that he had started getting calls from Markman’s clients, who were worried about their assets.
Months later, Markman Capital has only recently been uncovered as a Ponzi scheme. Markman’s widow tells us that investigators have found no victims.
As the Minneapolis Star Tribune, which first alerted us to this story, puts it:
Bob Markman secretly ran a Ponzi scheme for two decades. And he only saw one way out: killing himself for the insurance settlement.
It’s a sad story. It looks like Markman ran a blog (updated almost daily, with 5 fans) called “The Proactive Investor,” in which he mostly pulled articles from other sites, like one from a Sunday New York Times about finding an economic indicator in your underwear (The colour of the underwear signifies what resolution one is seeking for the year ahead. Red means love. Yellow means money,” he quotes.), or he simply blogged about unsophisticated investing platitudes like this:
Have you read that its a good idea to buy the stock of companies you know and respect? Companies whose products you use? While there is some truth in those thoughts, sometimes the best thing is to coldly look at where the money is to be made, hold you nose, and buy companies you hate.
Case in point: Here are the returns for some of the largest stocks in America for the 10 year period ending 12/31/09:
Home Depot: -57%
Coca Cola: -2%
Altria (the new name of the cigarette company Philip Morris): +269%
Ironic and interesting, eh?
That’s all for now. Smoke ’em if you got ’em……
Here’s something interesting though. Markman’s website – with acknowledgement that its manager has died – is still online.
So is a good chunk of his pitch to investors, including (possibly forged) CPA Attestation Report that “confirms” Markman earned 65.1% (after “management fees and trading expenses”) — UPDATE: Markman’s widow says he indeed made these returns — during the period from 9/30/08 to 9/30/09, during (his words) “one of the most volatile and destructive periods of this generation’s lifetime. Prices plummetted for six months only to soar for the next six months. The result, other than fear and disgust, was an S&P 500 that lost 6.9%.”
We’ve uploaded those documents for your critique. They’re below, right after you read Markman’s “disclosure” and his “personal bio.”
Of course we suspect that everything in the documents is a lie, much like his bio, which states:
The legendary financial journalist Louis Rukeyser wrote, “Bob Markman is one of the nation’s shrewdest judges of no load mutual funds.” Kiplinger’s Personal Finance noted that “His questioning of investment dogma comes across like sunshine piercing the fog.”
Mr. Markman is also one of a select fraternity of portfolio managers to lead a mutual fund to both a five star Morningstar rating and a Lipper Leader Award for the top performing large cap growth fund for the three year period ending 12/31/08. He now devotes his time to writing and managing money for individual investors and retirement plans.
Here’s his disclosure. The typos are his:
While we are proud of these results, always remember that past performance is no guarantee of future results and investors should not expect that degree of outperformance in the future. It should also be noted that these returns apply only to those clients who, due to their stated desire to have their accounts more actively managed and frequently traded, were in our ‘active trading’ grouping during the period and are not indicative of the results of any other group of clinets.
Below is a “quick overview of the features and benefits of Markman’s strategy”:
Markman introduced this document to investors by saying, “To see how a model income portfolio is allocated, click here”:
And here is the (possibly forged) document “confirming” that Markman earned investors 65.1% on their returns:
Like we said, we assume everything written in those documents is a lie, but we won’t know until someone from Markman Capital gets back to us. An email to them is still unanswered.