Wrong Way Star

Bill Regardie Founder, Regardie's Magazine
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While Gordon Gecko’s Wall Street may be Hollywood fiction, the best story in New York now is Galleon Group hedge fund founder and billionaire Raj Rajaratnam as he fights for his freedom in the trial of the century. In case you haven’t been following the case, he’s accused of making hundreds of millions of dollars from insider trading.

When I started to explain this to my eight-year-old grandson, he merely shrugged and said, “But, Grandpa, isn’t that what they all do on Wall Street.”

Since he seemed to know more about the market than me, I tried to drop the subject. But to no avail.

“What about that guy down in Miami Beach, Jacko Star?” he wanted to know. “The one The Financial Times called ‘Wrong Way Star,’” he said. “I’m doing a report on him for my second-grade finance class.”

“Boychik,” I said sheepishly, “I missed that. Who’s Wrong Way Star? He sounds fascinating.”

“He is, Grandpa. He was just indicted on 28 counts in federal court in Miami on many of the same charges as Raj is in New York. Only his defense is based on the fact that he’s dyslexic. Further, he just can’t do anything right, or so claims his defense counsel, Irving Schwartzberg, of Schwartzberg, Schwartzberg & Rodriguez.”

“Like what?”

“First, Uncle Sam has been taping Star for the last few years, so they think they got him cold. But it’s not so simple. Two years ago, he got a tip to buy oil leases in Idaho, but he screwed that up and instead bought 100,000 acres of corn fields in Iowa. When his advisor discovered the mistake, it was too late and he was stuck with ground. But with the world wide drought and grain prices soaring, his land is worth four times what he paid and the harvest is the highest in history.

“Then, two months later, he got a tip to buy gold. By mistake, he bought silver, which doubled in price. Gold merely increased 30%.

“Soon after, another tipster told him to buy copper futures, which jumped 30%, but Jacko wrote it down as cotton, which tripled and is still rising.

“Finally, this February, he made his biggest screw up of all. His most-trusted source told him to go long on uranium and short on oil. Of course, he got it backwards. Two week later, the 9.0 earthquake wreaked Japan, destroyed the future of nuclear power and drove oil to over $110 a barrel.

“The best that I can figure, Grandpa, is that Wrong Way Star has made at least $5 billion in the last two years.”

“Well, boychik, for someone with a learning disability, he’s certainly done pretty well. But Uncle Sam still might have a case. After all, he did make his money from insider information, even if he got backwards.

“That could be so, Grandpa, but so far the government’s record in winning these cases is a big fat zero, so I’m betting on ‘Jacko Star.’”

And I’m taking options on my grandson.

Bill Regardie is the founder of Regardie Magazine.