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Investing
How to Spot a Con Artist Before You Give Him Money to Invest
Ask him what he eats for breakfast
In February of 2004, I read about a twenty-eight-year-old hedge fund manager in The Wall Street Journal that was so weird I clipped it out and saved it in my journal.
The story focused on the return to high living in financial circles and used Bret Grebow, cofounder and principal of The HMC International Fund, as its prime example. Among the excesses he shared with the reporter were his purchase of a $160,000 Lamborghini (“his first ‘treat’ in months”) and the chartering of planes for $10,000 a pop to fly between Florida and New York (an air corridor not exactly underserved by commercial aviation).
But what really caused me to whip out the scissors and save Mr. Grebow’s story was his reasoning for spending $10,000 on a private jet instead of say, $300 on JetBlue: “It’s fantastic. They’ve got my favorite cereal, Cookie Crisp, waiting for me, and Jack Daniel’s on ice.”
Hmmm. If Warren Buffett, a bona fide billionaire, was compelled to christen his private jet The Indefensible when he finally bought one, it would seem that Grebow was guilty of a serious lapse in judgment — in both capital allocation and discretion (if not taste in breakfast cereal).
