Would you invest in a company that beat the S&P 500 with 19% returns over the last five years? Sounds interesting, sure…
But what if the chart of performance looked like this:
That is a really straight line. Just one little flat period in December 2022.
No, thank you. That’s a fraud.
I saw this chart in a Bloomberg story on David Choi and his Mars FX US hedge fund collapse. As of February of 2024 the Mars FX fund had raised over $330 million according to its Form D filing. MArs FX claimed the money was running through a partner called Tech RealFX. Mars FX blames TRFX. TRFX blames Mars FX. There’s no clear answer of what happened in the story, public statements, or lawsuits.
What is clear is that no investment returns chart should look like that chart. That’s a Madoff looking chart where the returns just go up and to the right with no dips.
Sources: