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.
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5 comments:
Thanks for sending me the blog. As you know I am a Ridgewood Investor as well and quite depressed by the prospects.
Our financial advisor completely screwed us. Hope he is enjoying his commission because my husband and I are moving our accounts to JP Morgan.
I will send this to all of our other friends who invested in the L, N and P funds.
Great post on the Ridgewood Dash for Cash. Hope Swanson and Company are happy. I will forward the link to others who took the bait on this bad deal.
Hopefully someday we will see some of our money but after two years and only 6% I am thinking I will be 6 feet under before it happens.
Ok that chart reminds me of what an idiot we are for investing in this thing. If I can get back to point zero in 10 years it would be a miracle. So much for the second home, college educations, early retirement. Thanks Swanson
I invested in W, X, and A-1. Been in for along time and haven't even gotten 50% of my money back. I get tired of the monthly news letters. Same old crap about having to fix broken heads, or repair "jumper" lines and inability to pay distributions this month. Then you get a long discussion of gas prices and what global situation is causing the impact. Who cares? If the money was invested properly, we should be getting better return at $60 a barrel. I have averaged about $120.00 per month over the last couple of years...after a $150,000 investment. What a sham....
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