Sanity check

[brianlondon]

Hello all - first post here - limited forex knowledge - just looking to sanity check the following and will suspend my intelligence and dis-belief until I get a view from those that know something about this subject.

Attended a seminar by company called cashbax - they have created a cashback loyalty system that will give a buyer 100% cash back on any item.

For instance I buy your house for £500k - I will receive £500K in seven years as cash back - I could choose to take out a lesser amount anytime between year one and seven.

It works thus - I pay you 500k for your house, you were having a tough time selling it and instead of discounting you entered used cashbax as incentive....once house sells you give 20% of sale price to cashbax. Effectively £100k in this example as a marketing fee.... ( bear with me) -

Cashbax will - after seven years not only give the buyer £500k back effectively clearing their mortgage etc , but will additionally pay you the seller the £100k marketing fee.

They state that they can achieve this via relationships with top forex traders and believe they will profit because in the above example they will return far more than the £600k that they need to pay out.

So my forex friends - guide me here. Warren Buffet returned 20%ish from 1960s.

Is it conceivable or even partially credible that this company can turn£100k into 650k
website is cashbax.co.uk or .biz for agents.

Really interested in replies to this subject

 

[Splitlink]

Whenever there is a financial crisis these new companies creep out of the woodwork. I don't like the look of this one, at all. So you went to a seminar. Were you looking for a franchise to put money into? I think that this is where we have to ask questions because it does not seem possible, to me, that a seller will be able to pay a bank what he owes and 20% to a loan company, as well. He might as well go bankrupt and be done with it. The francisee is going to pay, up front, how much?

They are going to play forex with other peoples money, ie, the franchisees. They are going to offer the franchsee commissions, as a hook, and, then, when no business comes in, that franchise will close.

As far the buyer is concerned, there's one born every minute. He might be paying over the market price in the sad hope that he is going to get 100% back, so he is going to have a loan problem later on. If, in a few years time, one does get his money back, I hope that we hear about it. I don't think that we will, though.

This is my view of the whole scheme.

 

[tomorton]

If a company had a method for turning £100k into £650k, they wouldn't need to market their services to retail customers at all. There are many ways they could raise cash on the back of such a projected return, the fact that they are raising investment funds through seminars for joe bloggs types like you and me immediately indicates that they know they would fail to borrow this in the City, where the sorts of due diligence that we can't replicate would shoot them down in an instant. If they know people who have great forex returns, why don't they sell that idea, or shares in it?

This sounds like a pyramid scheme or Ponsi scheme, where the early investors are re-paid not from profits but from new contributions by later joiners.

As for Warren Buffet, whilst not wishing to decry his achievements, the only rerason we have heard of this one man who has done what he did, is because nobody else has managed to do it, so when I see his name referenced, it shows me an illustration of what cannot be achieved.

 

[brianlondon]

Hi guys thanks for the replies

Tom...my thoughts in line with yours - the reason I referenced Buffet - just like Soros et al these guys are legends having achieved staggering returns but these staggering returns are around 20% annually. These guys reckon that 100k becomes £1m -I asked them if this was the case why wouldn't a high net worth individual stick £100m into fund and watch it become one billion ! They said that was entirely possible. My guess is that if they can trouser a few quid that they could close the doors. People who take a hammering are those who buy a house guessing it will be paid off in seven years.

Would still like to hear from others on this - in other parts of this forum some people suggest they are up 5% month on month - this suddenly seems believable by comparison

 

[wackypete2]

Managing large funds is a lot different than managing your own personal account. The fees and expenses are high for one. Also, regardless of what markets you trade the larger the fund you manage the harder it is to get in and out of giant positions quickly. The 5% per month may be ok for small personal accounts, but very difficult for large unwieldy funds. Remember, they are not managing a $100,000 fund....multiply that by all the investors who buy in to this....could be millions.

Peter

 

[Shakone]

The other issue is that they are giving you a guarantee. While I do believe there are traders who could make the money, I don't believe there are any that could guarantee it in advance.

 

[brianlondon]

Good points again - I will get the name of the trading company they use - no big secret they mentioned them a few times...based out of Geneva.

They were showing returns from last year...

Up most months by 7-10% down months seemed no longer than 2/3% annoyed as I had a website link.

Interesting post Peter .Still find it remarkable that a small trader could return 60% annually - why do I not know this ! Are there guys out there doing this ? Think if this is the case this is exactly the justification being used.