Scam Watch: Optionetics (UPDATE)

You may have noticed that I use Google advertising on the Share Investor Blog.

I use it because it is easy.

I have now blocked the offending advertising thanks to a reader, please let me know if you can still see them in a URL I haven't thought of.

There is one ad that keeps coming up and I must warn my readers about the company.

It is an options trading package that is over hyped, overpriced and underwhelming.

You can options trade by simply doing it yourself or perhaps buying a book and learning.

The company is called Optionetics and the ad will appear with your local URL depending on the country you are viewing this on.

Long-term readers of this blog might like to know that Philip MacCalister, he of Good Returns and a whole host of other financial websites and a rather underhanded individual when it comes to competing with me, is still spamming me with emails and the latest one was spruiking Optionetics.

Here is the link and the content of the email.

Mind you you cant expect much from a man who endorsed Bridgecorp and a whole host of other failed finance companies.

I DO NOT endorse Optionetics and would advise my readers to take a very wide berth of that company and anyone pushing it.


Related Links

Consumer.org.nz - Consumers take

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The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
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c Share Investor 2009

Auckland Airport's incentive scheme should fly out the window

It seems to this humble soul that the good folks who manage Auckland International Airport (AIA) live in a world where up is down, on is off, black is white and well... you get the picture.

One of the biggest contributors to the drop in Full Year 2007 profit at AIA announced a few days ago was the employee incentive scheme. Such a scheme rewarded employees if the company share price did well, with share options.

As most know the share price has indeed risen over this last year and that has been due to first rumours of a takeover and now a firm offer by Dubai Aeronautical Enterprise and other suitors kicking the tyres.

Now usually when a companies share price rises it is due to the company doing well financially and most of that can be put down to good management. In this case though the share price has risen because of a takeover offer and indeed the share price would have gone down in the absence of this offer as AIA was headed for a flat profit this year anyway.

To be rewarded when a company share price goes up in the first place is a little dodgy because there can be many reasons why this is the case. You can bet company management don't get docked payments for share price falls! In AIA's case the share price rise has nothing to do at all with management doing well.

In the real world, incentives are given for financial results and that is just the way it should be in this case. The fact that profit dropped substantially-by more than 10%- because of undeserved employee share options being handed out is simply an outrage that shareholders shouldn't have to put up with.

The passionless way that this option free-for-all was reported in the media just leaves me guessing as to why this options rort isn't being questioned.

I know this sort of thing seems acceptable by those who are board members of public companies and is a widely carried out practice in New Zealand and abroad but it is something that really rankles my hackles-a wonderful turn of phrase if I do say so!

It is up to shareholders to make their displeasure of this practice known to company management. I am not one to say incentives should not be paid, they should, but only for increased financial results. The bigger the profit increase the bigger the incentive payout I say.

Seems management at Auckland International Airport don't know what the word incentive means. If an individual or company gets paid for a decreasing profit then what is the motivation to do better?

Simply nothing.


Auckland International Airport @ Share Investor

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c Share Investor 2007