Storm Financial letter 6

Hi Michael- Are you aware that the Storm model, or models based on a similar philosophy, are used extensively around the world as a legitimate means of wealth generation. It has been and still is promoted by some of the most reputable Financial Advise instutions around Australia and your perception indicates to me, and I make this comment advisedly - that if you are going to report this matter in an objective and informative spirit - that you perform some research.
 
Do I understand correctly that because you personally view it as reckless, then that is sufficient to render it defective and that all of those engaged in it - as I have said, from all levels of the socio economic strata of  the country-many who, one would think are well qualified to recognise a defective product - fall into the category of being reckless therefore? I concede that there are many out there to whom the idea of leveraging into equities markets is anathema. No doubt also it would not suit certain people without the temperamental predisposition to some risk. This still does not make it a reckless product.
 
 As I have said there are stop-loss safeguards built into the system which for one reason on another, were not allowed to  operate. It will be on this point that I believe, future Court action will spend much time deliberating before it becomes clear as to why the mechanisms did not function according to the Product Disclosure Statement.
 
I would also add that one of the reasons Storm Financial became so successful in promoting this model was the level of professionalism that was attached to it. The mandatory education process to which prospective clients were subject leading up to the multiple steps needed to be taken before finally signing up, were highly rigorous and I believe, a standard above what competitors were offering.
 
I have already described the scenario wherein I believe the number crunchers at the CBA repudiated what might be described as deal making to ride out the crisis going on between Colonial and Storm behind the scenes. I also referred to the content of the transcript of the Federal Court on 24 Dec where Emmanuel Cassimatis's offer is in black and white. In the face of future litigation  I doubt if either party are likely to want to comment.
 
I might bring to your attention another dimension of this that may have escaped a lot of people. It is a fact that all of the Storm advisers and other staff were participants in the very same strategy  they were promoting to their clients and have been affected to the same extent by the events. Just ask yourself the question - 'What was it that prevented them from taking action to save themselves when they were in the perfect position to take stoploss action for themselves.
If there hadn't been something that was being relayed to them that gave them an expectation that everything was under control - do you really think they would not have reacted on their and on our behalf and bailed out sooner. It defies human logic that they would not have done something but rather chose to hang around while the ship went down.
 
Mike I guess the point I wanted to make is that there is another story to this - maybe eventually someone in the media will latch on to it and give it the exposure it deserves. It would be refreshing  if the coverage given to this devastating event had a bit more substance than the puerile stuff, for example, that was contained in an article on the smartcompany.com website headlined -'5 Lessons for the Storm Collapse'.
 
One of the five -'Spend your money on things that count' referred to the standard of the toilets in the Storm Offices and banged on about the Cassimatis's perceived preoccupation with their washrooms.  I mean, is that the best you fellas can do?