A VIEW FROM

Campaign Middle East - - NEWS -

In 1990, I was do­ing a record­ing with Adam Faith, the pop star.

Adam fan­cied him­self as an en­tre­pre­neur and be­gan talk­ing about in­vest­ments.

GGT had be­come a pub­lic com­pany and I had money sit­ting in the bank.

Adam said I was nuts – you don’t leave money in the bank, you put it to work.

He had all his money with an ex­pert and I should come and meet him – all Adam’s fa­mous friends in­vested with him.

So, af­ter the record­ing, Adam took me in his Rolls-Royce to see the ex­pert.

He had im­pres­sive of­fices in the West End, smoked a cigar and of­fered me a glass of cham­pagne – he told me about his im­pres­sive list of fa­mous clients. The whole thing made me very un­com­fort­able. It didn’t feel pro­fes­sional, it didn’t feel busi­ness-like. So I said I’d think about it, and left it at that. A few months later, I saw in the Evening Stan­dard that the com­pany had gone bank­rupt and “the ex­pert” had been ar­rested.

He was £34m in debt (around £75m to­day) and look­ing at 10 years in jail for dozens of counts of fraud.

Among the fa­mous peo­ple who lost a for­tune were Michael Win­ner, Se­bas­tian Coe, Fred­er­ick Forsyth and Adam Faith.

Peo­ple in­vested with him be­cause of all the other fa­mous peo­ple do­ing it. They didn’t want to be left out. Stephen Greenspan was pro­fes­sor of psy­chol­ogy at the Univer­sity of Colorado. He was fas­ci­nated by what makes peo­ple gullible. He wrote a book: An­nals of Gulli­bil­ity: Why We Get Duped and How to Avoid It.

His book was a com­pre­hen­sive study on the sub­ject of gulli­bil­ity, pub­lished in 2008.

Two days af­ter it was pub­lished, he found he’d been de­frauded of most of his life sav­ings by Bernie Mad­off.

Mad­off ran the largest ‘Ponzi’ scheme in his­tory and his clients lost about $18bn.

Ev­ery­one trusted him be­cause of his fa­mous clients – noone wanted to be left out.

Fa­mous peo­ple who lost a for­tune in­cluded Stephen Spiel­berg, Kevin Ba­con, John Malkovich and Jef­fry Katzen­berg.

Isaac New­ton was prob­a­bly the most in­tel­li­gent per­son who ever lived.

In 1720, he in­vested in the South Sea Com­pany, the hottest stock in Eng­land.

When he’d seen 100 per cent growth in the value of his shares, he cashed them in. He walked away with £7,000 profit (around £1.3m to­day). But ev­ery­one con­tin­ued buy­ing the stock and he didn’t want to be left out. So he used ev­ery penny he’d made to buy more shares. When the crash came, he even­tu­ally lost £20,000 (nearly £ 4m to­day).

As he said: “I can cal­cu­late the mo­tion of the heav­ens but not the mad­ness of man.” If New­ton is gullible, what chance have the rest of us got? So we shouldn’t be sur­prised when oth­er­wise in­tel­li­gent peo­ple in our busi­ness are gullible.

If ev­ery­one else is shift­ing their bud­get on­line, they don’t want to be left out.

Even though, as Bob Hoff­man shows, 43 per cent of mo­bile ad im­pres­sions are fraud­u­lent.

Even though it’s ac­cepted that only 52 per cent of web traf­fic is hu­man.

This from a study of a bil­lion ad im­pres­sions across a thou­sand mo­bile apps.

A fur­ther study shows that 88 per cent of mar­keters con­firm on­line ad­ver­tis­ing has no mea­sur­able im­pact on their busi­ness.

But de­spite this, ev­ery­one does it be­cause ev­ery­one does it.

The ra­tio­nal mind might fear fail­ure, but the emo­tional mind fears be­ing left out.

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