Yesterday Bob Swanson posted another one of his famous and now becoming more frequent letters to investors. The O Fund had another dry hole. After much hype the West Delta 95 came up snake eyes. Also known as a bust!
Thanks Bob Happy Valentines to you. Hopefully you and your family were out celebrating at a fancy restaurant while your investors in the O fund picked up the tab.
Not to fear Bob also reported good news on the same day. The L, N and R funds had a successful project. By April he says they will be producing lots of gas. Good job Bob. Hopefully this good news will last longer than the initial good news on the O fund West Delta project.
Again, Happy Valentines Day sorry our roses were wilted!
Thursday, February 15, 2007
Tuesday, February 13, 2007
Ridgewood Energy Rip Off - Every Investor Should Consider the Following
As noted in my earlier post, I am concerned that the folks at Ridgewood might be taking a lot of wealthy and not so wealthy investors for a ride and unfortuntely the financial advisors who should be looking out for their investors are only looking out for themselves.
Let's start with how things work.
1. Normally the investment advisor will ask you to listen in on a conference call with Bob Swanson and his team of "expert" advisors. They will talk about the projects the fund has identified and the huge potential that each represents. I invested in the K, L and M funds and based on the conference call with investors you would have thought they had discovered the fountain of youth.
There were all types of "high potential" exploration projects that they were going to pursue. Each had the potential to return 10, 15, 20 times initial investment. Even at 10 times initial investment one was led to believe $150,000 investment would be $1.5 Million. Wow.
2. The financial advisor then gets you to part with $150,000 of your hard earned money to invest in one of the Alphabet funds. The T fund was the last to close and it closed during October of 2006.
3. Several times a month Bob Swanson and his crew will put together an investor letter and send it out to the investors of all of their funds. Normally the letters will demonstrate how many dry holes they have hit aka the project in the conference call was a bust, but also they will talk about the need for new rigs, pipelines, re-engineering etc. To put it short and sweet they stall the current investors while opening up the next new fund.
If you can get a hold of one of their investor letters and specifically the monthly dividend letters you too will perhaps be concerned. Here are the results as things stand for the end of January.
Fund Name Date Closed Cummulative Return
B March 1992 277.1%
C October 1992 277.1%
D July 1998 101.2%
E June 1999 619.4%
F June 2000 195.9%
G July 2001 329.3%
H September 2003 96.6%
I December 2003 20.6%
J March 2004 7.8%
K August 2004 5.9%
L September 2004 16.5%
M November 2004 6.7%
N February 2005 29.3%
O August 2005 0.0%
P October 2005 0.0%
Q December 2005 8.1%
R January 2006 0.0%
Whats the point?
Remember when you invest in a ridgewood fund, you must get to 100% just to get your initial investment back. So out of the 17 Ridgewood funds only 6 of the funds have returned the initial principal to investors. Granted the E and G funds have been a tremendous success and I guess the saying even a blind squirrel will find a nut every now and then holds true.
For those of us who were not as fortunate, we are now left wondering if we even see our principal yet alone any potential returns. In the interim, Ridgewood and their "advisors" have collected 17% of your hard earn cash.
The old adage buyer beware......you were warned here first.
I will keep you posted on my L and M fund investments. If by chance you have invested in one of these funds I would be interested to hear your story.
Let's start with how things work.
1. Normally the investment advisor will ask you to listen in on a conference call with Bob Swanson and his team of "expert" advisors. They will talk about the projects the fund has identified and the huge potential that each represents. I invested in the K, L and M funds and based on the conference call with investors you would have thought they had discovered the fountain of youth.
There were all types of "high potential" exploration projects that they were going to pursue. Each had the potential to return 10, 15, 20 times initial investment. Even at 10 times initial investment one was led to believe $150,000 investment would be $1.5 Million. Wow.
2. The financial advisor then gets you to part with $150,000 of your hard earned money to invest in one of the Alphabet funds. The T fund was the last to close and it closed during October of 2006.
3. Several times a month Bob Swanson and his crew will put together an investor letter and send it out to the investors of all of their funds. Normally the letters will demonstrate how many dry holes they have hit aka the project in the conference call was a bust, but also they will talk about the need for new rigs, pipelines, re-engineering etc. To put it short and sweet they stall the current investors while opening up the next new fund.
If you can get a hold of one of their investor letters and specifically the monthly dividend letters you too will perhaps be concerned. Here are the results as things stand for the end of January.
Fund Name Date Closed Cummulative Return
B March 1992 277.1%
C October 1992 277.1%
D July 1998 101.2%
E June 1999 619.4%
F June 2000 195.9%
G July 2001 329.3%
H September 2003 96.6%
I December 2003 20.6%
J March 2004 7.8%
K August 2004 5.9%
L September 2004 16.5%
M November 2004 6.7%
N February 2005 29.3%
O August 2005 0.0%
P October 2005 0.0%
Q December 2005 8.1%
R January 2006 0.0%
Whats the point?
Remember when you invest in a ridgewood fund, you must get to 100% just to get your initial investment back. So out of the 17 Ridgewood funds only 6 of the funds have returned the initial principal to investors. Granted the E and G funds have been a tremendous success and I guess the saying even a blind squirrel will find a nut every now and then holds true.
For those of us who were not as fortunate, we are now left wondering if we even see our principal yet alone any potential returns. In the interim, Ridgewood and their "advisors" have collected 17% of your hard earn cash.
The old adage buyer beware......you were warned here first.
I will keep you posted on my L and M fund investments. If by chance you have invested in one of these funds I would be interested to hear your story.
Introduction to the Ridgewood Energy Rip Off
Background
Several years ago, my financial advisor called me with an investment idea that had the opportunity for "huge" profits in the natural gas arena. Shortly after our conversation, he sent me information on a group called Ridgewood Energy based out of Ridgewood, NJ.
The pitch was simple. Natural gas prices were sky rocketing due to a number of issues and this company Ridgewood had significant opportunities for exploration in the Gulf of Mexico. The company had created a series of funds they call the alphabet funds. Named the alphabet funds because they started with the B fund and by the time they had contacted me they were on the L fund.
My financial advisor who for many years was a very stable and steady as she goes advisor was somehow hot to trot on these Ridgewood Funds. I would later come to learn why he was so excited. With a 7.5% commission on each unit of $150,000, that works out to be a heck of a lot better than pushing index mutual funds that probably pay a fraction of one percent on each dollar invested.
If you are considering an investment in Ridgewood Energy funds, please give thoughtful consideration and perhaps push back on your advisor to ask the questions that perhaps I should have asked some two and a half years ago.
My next entry will outline some of the questions you should ask your advisor and some of the issues you should consider before investing in this "scheme."
Several years ago, my financial advisor called me with an investment idea that had the opportunity for "huge" profits in the natural gas arena. Shortly after our conversation, he sent me information on a group called Ridgewood Energy based out of Ridgewood, NJ.
The pitch was simple. Natural gas prices were sky rocketing due to a number of issues and this company Ridgewood had significant opportunities for exploration in the Gulf of Mexico. The company had created a series of funds they call the alphabet funds. Named the alphabet funds because they started with the B fund and by the time they had contacted me they were on the L fund.
My financial advisor who for many years was a very stable and steady as she goes advisor was somehow hot to trot on these Ridgewood Funds. I would later come to learn why he was so excited. With a 7.5% commission on each unit of $150,000, that works out to be a heck of a lot better than pushing index mutual funds that probably pay a fraction of one percent on each dollar invested.
If you are considering an investment in Ridgewood Energy funds, please give thoughtful consideration and perhaps push back on your advisor to ask the questions that perhaps I should have asked some two and a half years ago.
My next entry will outline some of the questions you should ask your advisor and some of the issues you should consider before investing in this "scheme."
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