Sins of Commissions or Omissions

Today Aug 23 (tomorrow is the last day of the Beijing Olympics) is the 1st Anniversary of the Asset Backed Commercial Paper (ABCP) meltdown in Canada. And it looks like the end is finally in sight as most retail holders voted and approved the bailout package. Only Corporate (such as Robert Friedland's First Dynasty Mines, is a holdout as $200+ million in proceeds from an equity financing were placed in ABCP prior to project approval - but there is no sympathy for the devil) and large Institutions remains as holders.

Soon after this story broke I found myself wondering how some of these retail investors could sleep with themselves at night. In the old days, before the new cyber-sins were invented, sins fell into two categories; Sins of Commission - things you did but shouldn't have and Sins of Omission - things you didn't do but should have.

Yet, in every market cycle Financial Advisor's learn the wages of these sins the hard way.

Clients are often disappointed to learn that they can't get unlimited returns without undertaking higher risks. But for those truthful enough to reveal the truth are often fired for doing so or replaced by someone else who tells the client what he wants to hear.

There is lots of blame to go round when individual investors claim - as I have read in the past year - that 1) a retail investor placed 100% of his widowed father's home sale proceeds because ABCP had higher much yields that comparable GIC's or TBill's. This fellow acknowledged going against his advisors advice but still wants to be compensated!

HELLO! What was he thinking!