Personal Finance | Chill Maadi

Why So Many Investors Fail

Conservative estimates place it around 70%… while others believe it is closer to 95%… the number of investors who “fail.” I suppose it shouldn’t shock us… after all, whenever you talk with a Mutual Fund representative, if they’re doing well, they will point you to the fact that they are in the 1st or 2nd Quartile – meaning, the fund they manage has returned more than 75% or 50% of the other fund managers’ portfolios. Obviously, there must be several then who are in the 3rd or 4th Quartiles (the bottom).

There are several reasons why investors fail and today I thought I’d share a few more.

It’s perplexing… the number of investors who continually lose money trading, but for some inexplicable reasons, continue to trade. I suppose a variety of reasons exist, including poor money management (high commissions on small positions eat away at any profits), the delusion they have the skills and knowledge to trade (after all, isn’t everyone else getting it?), or addiction to trading (like gambling, just “sanctified.”).

Some, in sheer frustration, choose to pay hundreds and even thousands of dollars for trading software that promises every success… so they get split screens, subscribe to live news feeds, etc. and still struggle to make money trading. Then they flood their email inboxes with a plethora of free newsletters… worth every penny!

I’m not slamming these individuals… after all, most of us have had experiences like these somewhere along the line. But I am concerned for you if this is your current experience… and I’d like to help.

I think one of the most fundamental reasons why investors fail and why people are losing money in the stock market is because they are trading rather than investing. Perhaps this is so subtle you think I’m trying to create something out of nothing… but hear me out for just a moment. When you think of the term “trading”, what comes to mind? A transaction, a swap, buying and selling, dealing, etc.

Now, when you consider the term “investing” what comes to mind? Yes, some of the same elements of purchasing and transaction but with an added component of you having to “put something into” the transaction. Investing seems to require more than to merely trade. And you’d be right…

If making money in the markets was as easy as trading this stock for that one, and then exchanging it again for another one, we’d all be successful… but very few do this well. Instead, the average Weekend Investor needs to do less “trading” and more “investing.” You’re going to have to put something extra into the transaction… considering the fundamentals of a stock, watching the technical indicators, and keeping track of your “investments” because these investments of time, work, thought, consideration, management, etc. will all determine how successful you’ll be as a financial investor.

I realize most of you don’t have the time to do this on your own… hence, you should stop trading and simply buy the index when you have the money you can spare.

5 Ways to Manage Market Risk

Doctor Stock has experienced some excellent trading success so far. Much of that success is due to his disciplined use of market risk management techniques. In his quest to help you make money on the markets every morning, he has often emphasized the need to balance risk vs. reward.

There are many ways that traders and investors can manage market risk in their portfolios. Here’s a sampling of 5 of the most common ones:

Momentum

The trend is your friend until it ends. This is a crucial component of Doctor Stock’s strategy, and he tracks it for you at the top right corner of this site. It’s tough to make money by anticipating a change in trend. It’s better to wait for the turn and buy once it’s confirmed. “The market can stay irrational longer than you can stay solvent.” That trading axiom, coined by economist John Maynard Keynes, has become a cliché for a good reason. Many a trader has gone bankrupt fighting the tape.

Stop-Loss Orders

I know that Doctor Stock makes fair use of these as well. Before you enter a position, it’s essential to know when you will exit. You can set one or more profit targets, but it’s even more important to limit your losses. A stop-loss order or trailing stop can help you do just that. There are tons of ways to choose a stop loss level, from percentages, trend lines, and moving averages to the true average range or simple dollar amounts. You need to find the method that works for you and your trading psychology. It’s less important how you use them. It’s more important that you use them. Set a stop loss level before you trade and stick to it.

Position Sizing

One way to limit the amount of market risk you take is to limit the amount of money you invest. If you are placing a highly speculative trade, or one in which you have less confidence, you may want to limit your risk by taking a smaller than normal position. Similarly, if you are uncertain about market momentum, it may be wise to trade smaller until a more well-defined trend emerges. Always set rules for yourself on the maximum amount of money you are willing to risk on each trade as a percentage of your total investable capital.

Diversification

You’ve heard about this one before. It’s essential to diversify your capital by investing it in asset classes that aren’t correlated with one another. Unfortunately, there are times (like the recent market crash) where most asset classes move in unison. That’s why it’s important to keep at least some liquid cash on hand. There are many different ways to diversify your holdings: geographically, by asset class, sector, market capitalization, and many others. The key is to put your eggs in a few different baskets so that if one company, region, or asset class gets destroyed, your losses will be limited.

Rebalancing:

This strategy pertains more to market risk management for investors as opposed to traders. Many traders only actively trade a portion of their capital. They invest the rest of it (often their retirement funds) more conservatively, with a longer time horizon in mind. One risk management strategy for investors is to set an asset allocation (50% stocks, 30% bonds, and 20% cash, for example) and rebalance it periodically. If the equity portion of your portfolio has performed very well and it now constitutes 60% of your holdings, you would sell some of those holdings to bring your allocation back to 50%.

If your bond holdings have performed poorly and now makeup only 25% of your portfolio, you might consider buying more to rebalance your bond allocation. This is one way to buy low and sell high automatically.

Disciplined market risk management, in whichever form(s) you choose to implement, is the key to successful investing and trading. What kinds of strategies do you use to manage risk?

Book Review: The Investor’s Manifesto

William Bernstein says that he wrote The Investor’s Manifesto: Preparing for Prosperity, Armageddon and Everything in Between even though he swore he would never write another book after The Four Pillars of Investing (read my review) because, in his view, the dramatic market developments of 2008-09 provided a perfect “teachable” moment to clearly define a set of timeless investment principles.

In this book, Mr. Bernstein starts off with an overview of financial theory illustrated with relevant bits of financial history, then takes readers on a tour of the behavioral traps they might stumble into and concludes with the mechanics of building a portfolio. If this synopsis sounds familiar, it is because Four Pillars dealt with similar themes: the theory, history, psychology, and business of investing.

As you might expect of a brilliant writer like Mr. Bernstein, his writing is so quotable. Here are some examples:

“Investors cannot earn high returns without occasionally bearing great loss. If the investor desires safety, then he or she is doomed to receive low returns”.

“… the rewards of equity ownership are paid for in the universal currencies of financial risk: stomach acid and sleepless nights.”

“Much has been made lately of “black swans”: rare and supposedly unexpected events that roil society and the financial markets. In the world of finance, the only black swans are the history that investors have not read.”

“You are not as good looking, as charming, or as good a driver as you think you are. The same goes for your investing abilities. In an environment filled with incredibly smart, hard-working, and well-informed participants, the smartest trading strategy is not to trade at all.”

Mr. Bernstein is a wise investor and talented writer and while The Investor’s Manifesto is a very good book, I feel that it doesn’t quite achieve the brilliance that The Four Pillars did. If you’ve read the previous book, you can re-read it and safely skip this one. If you haven’t read Four Pillars, perhaps that’s the Bernstein book you should be reading. The Investor’s Manifesto is published by John Wiley.

Book Review: The Four Pillars of Investing

William Bernstein, a practicing physician, has written an excellent guide to invest (affiliate link) that contains important (as the sub-title says) “lessons for building a winning portfolio”. The Four Pillars of Investing that the title refers to are theory, history, psychology, and business of investing.

Often, books on investing are dry, and reading them is a bit like working through a dense textbook, but fortunately, this scholarly book is not one of them. Even the driest theoretical concepts are illustrated with historical examples.

In the section on history, Dr. Bernstein tells the tales of bubbles and busts past and present and points out that lack of historical knowledge hurts investors the most. I realized that this is an area I need to learn more about and helpfully, the author provides a list of useful books in Chapter 11 (no pun intended). The book concludes with practical ideas for assembling your portfolio.

I can’t hope to do a better job of summing up the contents of this book than the author himself:

The overarching message of this book is at once powerful and simple: With relatively little effort, you can design and assemble an investment portfolio that, because of its wide diversification and minimal expense, will prove superior to most professionally managed accounts. Great intelligence and good luck are not required. The essential characteristics of the successful investor are the discipline and stamina to, in the words of John Bogle, “stay the course”.

I think “The Four Pillars of Investing” is worth reading and would also make a nice addition to your bookshelf (I am adding it to my list of recommended books).

Of Credit Cards, Credit Scores and Creditworthiness

Over the past few years, I have realized that many people have misconceptions about credit cards, credit scores, and creditworthiness. Credit cards are considered as liabilities and looked at as if it’s a loan. However, in reality, a credit card is nothing but just another mode of making payments and much more rewarding as compared to other methods of making payments in terms of credit period, reward points, offers, discounts, and cashback, etc. among other things.

It only gets messier when people behave in an indisciplined manner while using credit cards for spending beyond their means just because people have huge credit limits on their cards—defaulting on payment of credit card bills by not paying the full amount due on time, using credit cards for withdrawing cash in times of emergency, etc. People behave casually while falling into these financial wrongdoings without bothering/realizing that all of this indiscipline comes at a substantial financial cost in terms of massive interest, fines & penalties, and severe damage to their creditworthiness.

If one can use the credit cards efficiently by exploiting their features and benefits without getting into overspending beyond their means and without indulging in any financial wrongdoings, credit cards can be one of the most significant assets. Therefore, a person who follows below discipline while using credit cards can have a very healthy personal finance and creditworthiness:

Utilizes his credit cards for making his regular payments, which he would otherwise do irrespective of whether he has a credit card or not;
Does not get into overspending just because he has a credit card and a significant limit on it;
Pays all his credit card bills in full on or before due dates without any exception;
Does not use any of his credit cards for emergency cash in times of crisis;
Never takes any loan or spends with costly EMIs on credit cards etc.

Often, a person not having any credit history (i.e., no record of loan or credit cards) is denied loans by banks / financial institutions despite having adequate income levels.

Credit Score / Creditworthiness:

Another big misconception is one or more of the following factors adversely affect the credit score/creditworthiness of a person:

Having one or more credit cards
Having a considerable credit limit on credit cards
Upgrading the credit limit every time there is an offer to do so

The truth is none of the above factors impact a person’s credit score unless there is a default or high credit utilization ratio on his credit card. Apart from theoretical knowledge about these aspects, I have my own practical experiences to back my above observations. I have been using seven different credit cards for the last many years. All of them issued by various banks / financial institutions having different credit limits, and every time I get limit enhancement, I opt for it.

Apart from these credit cards, I also have two home loans and one car loan in my name. Still, my credit score never went below 750 since I took my 1st credit card eight years ago and my latest score, checked yesterday, stands at 800.

How you can effectively use credit limits on your cards to improve your credit score

One of the crucial factors which affect your credit score is the credit utilization ratio. It means how much percentage of credit limit you utilize on an average, e.g., if you spend Rs 10,000 on your credit card, which has a limit of Rs. 1,00,000, you have used just 10% of your credit. Likewise, if you spend Rs. 50,000 on the same card, your credit utilization ratio is 50%. The lower the credit utilization ratio, the better for your credit score/creditworthiness. You can manage your credit utilization ration in two ways, either by keeping your spending on credit cards as low as possible or enhancing your credit limits on your credit cards as high as possible. I preferred to choose the latter.

Over the years, I built a portfolio of 6 credit cards, setting different billing cycles for each one of them so that I get to use all the cards every month for a few days. See the table below for easy understanding:

Card	Bill Date	Usage Dates	Credit limit	Spends	Utilization	Cumulative Limit	Cumulative Spends	Cumulative Utilization
1	3rd	4th – 8th	1,50,000	6000	2.5%	150000	6000	2.5%
2	8th	9th-13th	2,10,000	10500	5%	360000	16500	4.58%
3	13th	14th – 16th	5,00,000	5000	1%	860000	21500	2.5%
4	16th	17th-21st	3,50,000	14000	4%	1210000	35500	2.93%
5	21st	22nd-28th	1,40,000	7000	5%	1350000	42500	3.15%
6	28th	29th-3rd	1,50,000	2500	1.67%	1500000	45000	3%

You can see in the above table how one could build a portfolio of credit cards to make the best use of the credit period by setting different billing cycles and also keep your utilization low by spreading it over several cards in a month.

I have been practicing this for several years now, and it has neither affected my creditworthiness nor the health of my personal finance negatively. Instead, effective utilization has strengthened my personal finance and boosted my credit profile. I hope you find this note insightful.

This is CA Anand Kankariya’s indigenous note on credit cards as part of financial awareness. Please share your feedback/suggestion below.

How to Spot a Multibagger

A Multibagger in stock market parlance is a stock that can return multifold returns when invested in it. The holy grail of investing is to identify such multibaggers and hold them in your investment portfolio.

To spot a multibagger needs a thorough study of multiple fundamental parameters, a few of which are listed in this article. Please note. However, we cannot be rigid on any of these parameters. We need to be flexible to interpret things from a bigger picture point of view.

So what are these parameters of a multibagger stock that we should look for?

No doubt about business survival.

Identifying a multibagger begins with identifying a business that can weather the test of time. Whether there be a health crisis, economic crisis, or political crisis, these businesses should not have any difficulty in surviving. When I was young, my father told me that to survive, humanity will always need food and consistently invest in promising companies that cater to the hunger of the masses.

There are many other businesses, apart from those in the food industry that can survive and thrive in adverse circumstances. The health sector is one; the information and technology sector is another. There may be sectors that will come up in the future; you may be aware of them due to your line of work. Look into those businesses.

Visible & sustainable growth potential

Most businesses are not built because the management wanted them to remain stationary. Entrepreneurs and management want a steady and sustainably growing business. Look for companies that are growing at a fair clip with good management.

A management team that continuously innovates and optimizes its core business should provide profitable growth for investments in the company. A management team that is not focused is a poor innovator, and does not optimize resources, may give spectacular returns in the short term, but may not be able to sustain in the long run. Such businesses usually do not provide multibagger returns.

Management has a vision of growth.

Identifying potential in future markets is a must for any good management. The company should not bask in the past and should be forward-looking to identify the ideal growth opportunities. The management should be ethical and provide adequate consideration for every stakeholder.

Reasonable Promoter stake

There should be fair skin in the game from the promoter. Many successful investors avoid companies that have a very low promoter stake. Ideally, the promoter should have at least a 50% holding in the company, and the higher this number, the better it is, and the likelier it is to end up as a multibagger. If in case there is a low promoter stake, then promoters should increase stake at every possible opportunity. Also, pledging should either be zero or minimal.

Debt zero or going towards zero

Debt is becoming a dirtier word at the individual as well as at the corporate level. A Debt to equity ratio of less than 0.5 should be an ideal investment; however, do remember that smaller companies that are growing fast may not always be debt light—most of the time, the lower the debt, the better the valuations.

Increasing cash flow

At the most fundamental level, a company’s ability to create value for shareholders is determined by its ability to generate positive cash flows, or more specifically, maximize long-term free cash flow (FCF). If the cash flow of a company is increasing, it means that the company is growing well and can use the amount to grow itself further.

Rare equity dilution

The lesser the equity dilution, the better will be the valuations. Stock dilution, also known as equity dilution, is the decrease in existing shareholders’ ownership percentage of a company due to the company issuing new equity. New equity increases the total shares outstanding, which have a dilutive effect on the ownership percentage of existing shareholders. Management should avoid equity dilution at all times. To improve the liquidity, equity dilution is suitable sometimes; however, it should be only when the proportionate growth is visible.

Reasonable dividend

If the company is showing earnings of 100 & giving dividend equivalent of just ten or less, it raises more doubts on such companies before building conviction. There should be an acceptable dividend policy; however, if the profits are being used to improve the business quality further or for capacity expansion, fewer dividends may be sufficient.

Low PE

Lower the price-earnings multiple, better multiple returns potential in the future. With the growth in earnings & with every new milestone achievement, PE gets re-rated, and then there is usually a multiplier effect on the stock price.

Association with a brand

If the company has its growing reputation or is associated with some client who itself is a brand, that’s a big positive.

In conclusion, do remember that these are just a few aspects to spot a multibagger. Many stocks may not fit into any or all of these parameters. An example is Bajaj Finance, which has proven to be a massive compounder despite not checking many of the boxes like Debt, Environment risk, or having Low PE. It is essential to be flexible when looking at the fundamentals of the stock before investing in it. If you are a retail investor, keep some basic things in mind as follows:

1. Why you are investing – invest with a goal and plan.

2. Time frame – you may be better off in debt instruments or bonds for a short time frame.

3. Knowledge of the company/industries – stick to your circle of competence.

4. Risk and Reward ratio – Never invest without learning the risk associated with the particular investment.

5. Stock price is affected by market condition/Govt policy, so keep updated – especially true of highly regulated sectors.

6. Keep part profit booking/average – you can do this downwards or upwards.

How much is your Endowment Policy really worth?

Endowment policies have received bad press in recent years, due to many people’s policies not maturing at the value they may have been expecting. If you have an endowment policy but are unsure about how much it is actually worth, you may want to read on.

What is an Endowment Policy?

Endowment policies are usually used to pay off interest-only mortgages. There are two parts to the policy; the investment, and life cover. The policy lasts for a set amount of time.

If the policy dies during this time, the mortgage is automatically paid off. If the holder is still alive at the end of the ‘life’ of the policy, it should be worth an amount which is enough to pay off the mortgage; but this is not guaranteed, it depends on how the markets perform.

In recent years, some policyholders have found that their endowment is unlikely to reach the valuation that was predicted when they took out the policy. This leaves them unable to finish paying off the mortgage and can lead them to have to find other ways to pay off the mortgage. Consequentially Endowment Policies have not been as popular in recent years, with many lenders no longer offering them.

Pros

There is still a chance that your endowment will be worth enough at maturity to pay off your mortgage and some.

Cons

If the policy doesn’t perform as well as expected, it might not pay off the mortgage.

An Endowment policy will only repay the assured sum if you die, you may have cause to buy extra life cover to provide for other debts.

When the policy expires, so does your life insurance.

How do I know if my Endowment will pay off my mortgage?

Speak to your endowment provider. If it seems likely that your policy is unlikely to be worth enough to pay off your mortgage at maturity you should speak to an Independent Financial Advisor (IFA). You can find your local IFA at Yell.

For more information, you can contact the Financial Services Authority, who is in charge of dealing with complaints about endowment policies. It is also responsible for securing compensation for anyone who thinks they may have been wrongly sold an endowment mortgage.

There are private endowment buyers who are willing to purchase with-profit endowment policies of a certain type. This can recover some of the value of your endowment policy. Patient investors will buy up several small endowment policies and wait for them to mature, something you may be unable to do.

Investing In Gold As Part Of Retirement Plan

It has been hundreds of years since people have realized the importance, and value of gold around the world. As it is a component in several industries, the demand for gold has actually increased with the passage of time. Now it is also considered a good store of value with more, and more investors opting for gold. This option is worth considering for anyone who is retiring.

The recession and economic downturn have de-motivated the investors; everyone is doubtful about making any investment. However, gold has maintained and even increased its value during this recession period. It is the least affected, and recession-proof investment for retired people, who can maintain a stable, and wealthy living conditions in their old age.

The stock market did collapse, and many big investors dropped from billions to pennies. Any person, near to retirement, is now frightened to make any investment in the stock market. On the other hand, the prices of commodities are rising day by day, and inflation rates are likely to go higher.

Gold is the wisest investment now for the people, especially for retired people who do not have many options to try. Any quantity of gold can contribute to a good saving at the end of the year. Gold bullion value rarely depreciates and makes it an ideal choice for the masses.

All precious metals, including gold, are very smart choices of investment, as they bring a measure of stability to the investment of an individual, or retirement plan. It brings a degree of security to the plan. Other avenues of investment like mutual funds, stocks, and bank deposits are not recommended, as they may deteriorate in value with the changing rates of interest. This is the reason why gold is considered valuable by all as it only increases in its worth with time.

The security, protection, stability, and profitable value of gold cannot be challenged by anyone, even today when prices are increasing. Currencies such as the US Dollar and Pound Sterling may depreciate, but gold never does. Investment into gold is a part of the contingency plan of many investors, and especially those looking forward to retirement.

Different ways by which, you can add gold to your retirement investments are as follows; Gold coins and bullion can be bought from a dealer, but for this, you must have an arrangement of a safe place. You can buy shares of an exchange-traded fund, or you can own individual gold mining stocks. Investing in precious metals mutual or exchange-traded funds is also an option for investing gold. Finally, you can invest in commodities funds, as part of your overall asset allocation strategy.

Those people who invest in gold do not turn all of their wealth or life savings into gold stocks; they simply do it as part of their plan to safeguard their assets to have a lucrative income in the future. This can only be accomplished if a sensible retirement plan has been designed. The fluctuations in the market can never be predicted. Whenever the market looks to be in a position where the demand would increase, the smart investors start to invest. In simple terms, investment in gold is a secure move that is likely to get for you a steady flow of profits in the future.

The Differences in Debt

Debt is one financial matter that fills me with dread. The prospect of owing someone else money is like a crushing weight on my soul. But that being said, debt can, at times, be a good thing.

I classify debt into three categories:

Debt that does not add value.
Debt that adds value.
Debt that does not add directly add value, but is necessary, or has the potential to add value.

First, let me clarify that by “value,” I mean some intrinsic financial worth. Not the kind of value that you get when seeing the joy in your kids’ eyes while opening Christmas gifts.

Debt that does not add value is destructive. That new car is not increasing in value; it is depreciating. I know what you’re thinking, “Dude, I love my car, and I need it to drive to work, so it does have value!” Consider my ₹8,00,000 car loan that I took out last year. I’ve diligently been making payments every month, so my liability has decreased. Unfortunately, cars don’t last very long, and the resale value is decreasing even faster than I’m paying it off! This means that even if I were to sell it today, the best I could hope for is to make enough to pay off my loan.

Debt that does add value can actually be a good thing. Most people who open a business do so with the help of a loan. Ideally, the business will begin to make money, and the business will be worth more than the value of the loan. There are many examples of this constructive type of debt. But the idea is that you get a loan for the purposes of making money. This is leverage and thus needs to be used with care. However, if you know that you can borrow money at 6% and you know that you’ll make 8% off of the investment, then you’ve just earned 2% on money that didn’t belong to you. Even better is that (at least in India), you can deduct the interest from investment loans!

The third type of debt lies somewhere between the previous two. For example, taking out an education loan does not immediately provide you with a return. For the four years (or two, or ten, …) that you are in school the loan money does not provide you with a fiscal return on your investment. But in the end, when you get your high-paying job, it does reveal its benefit.

I will also place in this category the most common debt, your mortgage. Many people claim their home is an investment, and therefore it is constructive. I disagree;

You make mortgage payments out of your own pocket rather than having the investment pay for it;
You would not likely sell your ‘investment’ because where would you live;
In India and the USA, these payments can be used against taxes. However, this is not the case in many other countries, such as Canada.

Don’t get me wrong; homeownership and mortgages can be a good thing. I simply argue against it being a constructive debt.

So my goals in order of importance to me are to:

Eliminate all destructive debt.
Reduce necessary or non-value adding debt.
Make use of constructive debt where prudent.

I’m sure most people would agree on the first item. However, it is the last two points that will draw a lot of contention.

In the past few years, people have been loading up the mortgage debt to the point where they can afford little else – all in the name of home-ownership. 25-year mortgages have now become almost commonplace so that you can retire in debt.

With the low cost of borrowing, even so-called constructive debt is running rampant (leveraged buyouts, etc., and included in this). Corporations buying another or an individual buying any arbitrary stock with debt simply because it’s cheap will certainly be sorry once rates rise and/or the company’s finances crumble. That is why I say use leverage when prudent

Limiting how much someone can steal from your credit card

I’m sure anyone reading this page has ordered something from the internet if not many things. Every time you make a purchase you’re exposing your credit card to strangers, you might think its just computers talking to computers but at my previous company, I was hired to create a new e-commerce site for them that interacted with an AS400 system they used for phone orders.

Their old method was

1. Someone places an order online
2. Each day it was someone’s job to PRINT out the orders WITH CREDIT CARDS NUMBERS
3. That person would then hand key them into the AS400 system, if they didn’t finish them they left a stack of orders on their desk overnight tech supports, janitors, salesman, etc… basically, anyone could stroll by, glance at the order on top and get your CC number and your billing address, everything they need to use your card. This was at a multi-million dollar e-commerce site too, not just some 5 order a day place, we’re talking hundreds of orders a day, just sitting around.

As a consumer you cannot prevent your credit card information from being stolen in this manner, all you did was key it into a browser now it’s on someone’s desk waiting to be keyed in. Since that experience what I did was contact my bank and get a credit card that I specifically use for the web with a $1000 limit, so the most I could get hosed for is a grand or less if there is a balance. I’m sure a lot of people out there enter their cards with 10, 20, 30 thousand dollars available. Why take the risk, get a small card just for the net, $250, $500, $1000 limits. This is also helpful for gas stations, restaurants, etc.

I know a few people first hand, one waiter and one full-service gas pumper who would copy CC numbers down from customers cards and then use them that night to order whatever they wanted, it worked and they got away with it.