Secret Investments

Over the past 15 years, I have seen numerous investments in assets classes such as real estate, equities and businesses to name a few.  Given enough time, anyone who is exposed to numerous opportunities will eventually be exposed to a “secret investment”.  In order to find out more about this secret investment, one must sign a non disclosure agreement which states you will not divulge the contents of what you will be told.  I have done this on a few occasions and have found a consistent pattern which I wish to pass on to you the reader.

Before you ever agree to ask more about any secret investment you encounter, ask the person presenting it to you the following questions:

1) Microsoft was not a secret back in 1975 when Bill Gates started the company out of his garage. Does your secret investment have the potential to be bigger than Microsoft?

2)  Google was not a secret when Larry Page and Sergei Brin started it back in 1998. Does your secret investment have the potential to be bigger than the multibillion dollar initial public offering that occurred in 2004?

If you can answer yes to these two questions, then use this third one to get a crystal clear answer as to where the person pitching you is coming from.

3) President John F Kennedy announced to the world in the early 1960’s that America would land on the moon. Conspiracy theories aside, this is unquestionably one of the greatest achievements of all time. Is their secret investment bigger than that?

My guess is that it won’t be.  If these three examples are not secrets, then why would you invest in something which must be kept quiet?

My experience has taught me that every secret investment out there is another way to say that it is not entirely legal and should be avoided at all cost!!!  Besides, using the secret investment argument and that it is off limits to an auditor of Canada’s national tax authorities can lead to a $25,000 fine and/or up to 1 year in prison as per Section 238 of the Income Tax Act.