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Thursday, February 15, 2018

‘I Need a Miracle Every Day’: Jake Peavy Picks Up Pieces of a Shattered Life | Bleacher Report

“When you’re in the baseball world, you’re in a bubble,” Peavy says, speaking slowly and choosing his words carefully on this chilly January morning. “You get to where the San Francisco Giants’ baseball game that day is the biggest thing in the world.

“There’s a lot of life going on around you that you can be blind to if you’re not careful.”

Two days into San Francisco’s 2016 spring training camp, the bubble burst: Peavy learned that a financial advisor to whom he had entrusted his retirement savings had siphoned away some $15 million to $20 million in a Ponzi-like scheme. The rest of that season, he was buried under an avalanche of depositions, lawyers and numbers he didn’t fully understand, reeling from the shattered trust of a man he thought was his friend.

Jim Furtado Posted: February 15, 2018 at 03:11 PM | 39 comment(s) Login to Bookmark
  Tags: jake peavy

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   1. Zach Posted: February 15, 2018 at 05:06 PM (#5625728)
It's an interesting read, but an odd tonal mixture. He got ripped off terribly, but he's doing ok, otherwise.
   2. jmurph Posted: February 15, 2018 at 05:12 PM (#5625732)
It's an interesting read, but an odd tonal mixture. He got ripped off terribly, but he's doing ok, otherwise.

Agreed. To deliver on "shattered" I think you need some kind of tragic death or disabling accident?
   3. . . . . . . Posted: February 15, 2018 at 05:19 PM (#5625736)
Geez, being robbed of $10 million and your wife serving you with divorce papers doesn't do the trick? Tough crowd.
   4. jmurph Posted: February 15, 2018 at 05:23 PM (#5625739)
Geez, being robbed of $10 million and your wife serving you with divorce papers doesn't do the trick? Tough crowd.

Ha, no I agree, broadly. It's just, in an otherwise long and open piece, he didn't really convey Peavy being super upset about the divorce. And it feels like they really hammered home that he's still very rich. Anyway my complaint isn't with Peavy obviously it's just an oddly written article.
   5. Zach Posted: February 15, 2018 at 05:38 PM (#5625744)
Getting ripped off and having to go to court to deal with the aftermath sounds pretty awful, no matter how much you start with. But from the article it sounds like he's having basically the retirement he wanted, with maybe a little less cash in the bank. And he got divorced, which is pretty bad, but has 50% custody and claims not to even know why his wife wanted the divorce, which sounds pretty amicable.

   6. 6 - 4 - 3 Posted: February 15, 2018 at 07:12 PM (#5625786)
IIRC, it was a really messy divorce. If that makes a difference.

Hope he makes it back to The Show, but he's got an uphill climb. He was not very good in his last year with the Giants. And now he's almost 37.
   7. the Hugh Jorgan returns Posted: February 15, 2018 at 07:40 PM (#5625797)
So he began searching, and what he found was a financial advisor who appeared to share his values: Christian, charitably inclined, family man.


<insert numerous jokes here>

Dude has earned $127 mil so far, so yeah losing $20 is a big blow but not one that has left him destitute.

As for the divorce, who knows what goes on behind closed doors. I've been through one of those...not fun. Good that he fought hard and got 50% custody of the kids, that's nice.

For us non-lawyers on this site, going through a legal wrangle is just a long and painful exercise though with the financial mess, he could've walked away and just taken the loss on the chin and moved on and avoided months/years of legal battles on that front.

I know a guy who's worth about $70 mil, he got burned by a business partner for about $25 mil. Had his accountants quickly look through what had happened and realised very quickly the money was never coming back. He had a stiff drink and just said f*ck it and walked away as he saw no point in giving lawyers millions when it looked like his chances of retrieving any funds were really poor.
   8. ERROR---Jolly Old St. Nick Posted: February 15, 2018 at 07:52 PM (#5625802)
As for the divorce, who knows what goes on behind closed doors. I've been through one of those...not fun. Good that he fought hard and got 50% custody of the kids, that's nice.
I'm a vunderful housekeeper. Effry time I get a divorce I keep the house

---- Zsa Zsa Gabor
   9. Zach Posted: February 15, 2018 at 07:53 PM (#5625804)
The Securities and Exchange Commission filed suit in May 2016, alleging that Narayan put more than $33 million of his clients' money into an Illinois-based online sports and entertainment ticket business while portraying a low-risk investment strategy to them. The SEC also asserted that The Ticket Reserve paid Narayan nearly $2 million in finder's fees to steer that money its way.
...
The SEC suit played out in a Dallas courtroom throughout the '16 season. Peavy, who also learned that Narayan additionally had taken out some $5 million or more in loans in Peavy's name, was required to fly in several times.

If the SEC was involved, and some of the loans were in Peavy's name, then walking away probably wasn't an option.

   10. Zach Posted: February 15, 2018 at 07:55 PM (#5625806)
Three years into his career, Peavy says he had saved up $1 million and invested it with a big, well-established investment firm. But as time went on, he never felt like there was a personal connection. So he began searching, and what he found was a financial advisor who appeared to share his values: Christian, charitably inclined, family man.

Finance and law might be the two cases when you're better off going with the cold-hearted bastard than the nice guy who pays attention to your needs.
   11. McCoy Posted: February 15, 2018 at 08:15 PM (#5625813)
In would say then invest a small fraction of your money with the personal guy and let the big boys give you your 6% return.

The last thing I would ever want is one guy with virtually no oversight bring responsible for all of my money or a large chunk of it. I'm also not investing in start up companies that require me to put up large amounts of money.
   12. the Hugh Jorgan returns Posted: February 15, 2018 at 08:21 PM (#5625816)
If the SEC was involved, and some of the loans were in Peavy's name, then walking away probably wasn't an option.


Fair enough. I'm at work and like any good primer post was based entirely on NOT reading the full article!
   13. You Know Nothing JT Snow (YR) Posted: February 15, 2018 at 08:21 PM (#5625818)
Openly touting your religiousity is a pretty good sign of a huckster.
   14. David Nieporent (now, with children) Posted: February 15, 2018 at 08:44 PM (#5625829)
The last thing I would ever want is one guy with virtually no oversight bring responsible for all of my money or a large chunk of it.
Yes; I think I've heard some pretty good advice about eggs and one basket.
   15. Adam Starblind Posted: February 15, 2018 at 09:16 PM (#5625844)
Openly touting your religiousity is a pretty good sign of a huckster.


Indeed. It is a fact that tons of ponzi schemers and the like target congregants in their church. It's really not nice.
   16. snapper (history's 42nd greatest monster) Posted: February 15, 2018 at 09:24 PM (#5625849)
If the SEC was involved, and some of the loans were in Peavy's name, then walking away probably wasn't an option.

Also, if you want to take the tax loss, you probably have to make some effort to recover.
   17. the Hugh Jorgan returns Posted: February 15, 2018 at 09:52 PM (#5625856)
Indeed. It is a fact that tons of ponzi schemers and the like target congregants in their church. It's really not nice.


Well they've only themselves to blame. If you are going to believe in fantasy then Ponzi schemes are right in your wheelhouse.

Hey, somebody had to say it...

Also, if you want to take the tax loss, you probably have to make some effort to recover


I thought there might be something with respect to that. I do find it interesting that if you make no effort to recover, yet still get burned for the cash, that you'll have issues claiming the loss. I suppose the book like levels of paperwork authenticate the loss to an inarguable level.
   18. Tim M Posted: February 16, 2018 at 02:17 AM (#5625911)
Index 500 guys. You have many millions, why not put it someplace where you can actually watch it, track it, understand what it is doing?

This kind of thing is so common, i just don't get it.

Q: does MLB (or other leagues) give their rookies any kind of intro to finance, such as "don't let 1 unknown guy control all your money"?
   19. Fancy Crazy Town Banana Pants Handle Posted: February 16, 2018 at 05:28 AM (#5625920)
Index 500 guys. You have many millions, why not put it someplace where you can actually watch it, track it, understand what it is doing?

I mean just from the snippet, I think the problem is that Peavy would not have been able to understand what it is doing, even if he had gone that route. Or even knew about going that route...

Nothing wrong with that of course. Everybody has strengths and weaknesses. I am pretty sure there is no shortage of professional athletes whose eyes just glaze over when it comes to matters like these.
   20. Leroy Kincaid Posted: February 16, 2018 at 06:35 AM (#5625924)
Well they've only themselves to blame. If you are going to believe in fantasy then Ponzi schemes are right in your wheelhouse.


Those that pull these schemes are crooks and should go to prison. But the people who get sucked into it are likely guilty of being greedy.
   21. snapper (history's 42nd greatest monster) Posted: February 16, 2018 at 09:00 AM (#5625967)
I thought there might be something with respect to that. I do find it interesting that if you make no effort to recover, yet still get burned for the cash, that you'll have issues claiming the loss. I suppose the book like levels of paperwork authenticate the loss to an inarguable level.

Well, otherwise the IRS would have to worry about people manufacturing fake losses.
   22. You Know Nothing JT Snow (YR) Posted: February 16, 2018 at 10:55 AM (#5626023)
Those that pull these schemes are crooks and should go to prison. But the people who get sucked into it are likely guilty of being greedy.


Avaricious. Religious people are avaricious.
   23. . . . . . . Posted: February 16, 2018 at 11:03 AM (#5626032)
Index 500 guys. You have many millions, why not put it someplace where you can actually watch it, track it, understand what it is doing?


Can you explain how a SPDR works? I'll hang up and listen.
   24. Itsdrainageeli Posted: February 16, 2018 at 11:51 AM (#5626055)
It's a fund that tracks the performance of the S&P500;. The fund does this by purchasing a proportion of equities that match the makeup of the S&P500;. Because it has a relatively simple purpose (e.g., tracking), the management fees are relatively low as compared to other funds that have a more complicated underlying purpose or pay a manager(s) to pick "hot stocks", which is arguably a skill that doesn't exist absent inside information.

The two things that the average investor should know about this: (1) it tracks the performance of the S&P500;--so it's hooked to a broad-based equity basket (not a lot of exposure to a concentrated risk), and (2) it has lower fees than other "managed" funds.

Pretty much any investor that doesn't know what they are doing should put their "equity" money in an index500 fund. Heck, even really smart investors that know a lot about what they are doing should put their equity money in an index500 fund. I actually create my own S&P500; basket so I don't have to pay the fees of the fund as well as allowing me to separately sell off loss positions in order to generate capital losses (even if the portfolio is doing well).

Because it is an ETF, there is also a fairly complicated tax advantage related to it but that's probably a step further than the average investor needs to know.
   25. villageidiom Posted: February 16, 2018 at 12:52 PM (#5626099)
Those that pull these schemes are crooks and should go to prison. But the people who get sucked into it are likely guilty of being greedy.
In the sense that any investor is greedy, sure. But otherwise no, they're not greedy as much as they are stupid.

They don't understand anything about investments other than that you hand over your money and later you get your initial money plus some more, minus some fees, and ideally the "some more" is higher than "some fees". They don't understand what makes a good investment. That's fine, nobody understands everything. And they know they know nothing about it. That's a key part. They know they're stupid when it comes to investing.

What the Peavys of the world are being led to believe is that everyone else is more greedy than them. Everyone else is making more money on their investments because they're handing it off to someone who knows this stuff and can manage it full time. Going to Peavy and telling him he's making less than everyone else because he's stupid about it will work because Peavy will hear he's stupid about investing and tell himself "the story checks out". Then the story will be spun that because Peavy is stupid about this stuff it's important he find someone he can trust to manage his money, which of course will be spun to whatever superficial indicators Peavy would trust that the salesperson appears to have.

Most people know to avoid a salesperson coming to them and promising the moon and the stars. They don't know to avoid a salesperson coming to them and promising the average.
   26. David Nieporent (now, with children) Posted: February 16, 2018 at 01:07 PM (#5626109)

Indeed. It is a fact that tons of ponzi schemers and the like target congregants in their church. It's really not nice.
Well, yes, but this isn't limited to churches; the phenomenon is common enough that it has a name: affinity fraud. Lots of ethnic groups are subject to it.
   27. QLE Posted: February 16, 2018 at 01:26 PM (#5626120)
Well, yes, but this isn't limited to churches; the phenomenon is common enough that it has a name: affinity fraud. Lots of ethnic groups are subject to it.


And it's a type of fraud well-rooted into Ponzi schemes historically: note that Charles Ponzi originally started his scheme among Boston's Italian-American community and had it spread out from there.
   28. dlf Posted: February 16, 2018 at 02:09 PM (#5626145)
I have a tenuous personal connection with Peavy: before she retired, my mom taught 6th grade in Mobile and, a couple of decades back, had Peavy in her class. I don't know his personal story, but the school, UMS-Wright Prep, was a former military academy and is one of the places for Mobile's monied elites.
   29. Edmundo got dem ol' Kozma blues again mama Posted: February 16, 2018 at 02:22 PM (#5626155)
I don't know his personal story, but the school, UMS-Wright Prep, was a former military academy and is one of the places for Mobile's monied elites.


I went to a prep school with monied elites; it does not mean every student is among the monied elite. I know of one other guy besides myself who paid his own tuition freshman year with his paper route/babysitting/lawncutting/snow shoveling money.

We were about the two worst dressed in the class. ;0
   30. Curtschillingsdingleberrybatboy Posted: February 16, 2018 at 03:21 PM (#5626194)
I’m still not clear on why he needs a daily miracle?

But seriously, owning a recording studio for local bands and attempting to single-handedly revive the local economy of a tiny town in the middle of nowhere seems like the kind of thing professional athletes do BEFORE they get ripped off in a Ponzi scheme. If the scheme didn’t totally bankrupt him, them what he’s doing now will finish the job.
   31. PASTE, Now with Extra Pitch and Extra Stamina Posted: February 16, 2018 at 03:47 PM (#5626204)
MLM scams are enjoying a golden age right now--Amway was just the beginning--and religious people are their favorite targets. It seems like almost every conservative Christian woman I know is hucking this or that all-natural product and how you too can make a living from home, join the team today!

I know exactly one woman who verifiably has actually made money selling this stuff. Not a ton of money, but enough to legitimately not have to work otherwise. She got in very early on an MLM that subsequently took off. Of course her entire livelihood is going to go up in smoke the instant the downstream sellers who are paying her bills collectively run out of suckers and/or (more commonly) wake up themselves and realize they pay in more money than they get out.
   32. McCoy Posted: February 16, 2018 at 04:03 PM (#5626208)
Women for decades upon decades have been sucked into these pyramid schemes. Avon, Amway, Tupperware, The Pampered Chef, vitamins and so on. It's never going away.

My mom did The Pampered Chef thing for awhile and I new old time Philadelphia waiter that got into one of those pyramid schemes with household goods and cleaning products.
   33. Leroy Kincaid Posted: February 16, 2018 at 05:00 PM (#5626234)
In the sense that any investor is greedy, sure. But otherwise no, they're not greedy as much as they are stupid...Most people know to avoid a salesperson coming to them and promising the moon and the stars. They don't know to avoid a salesperson coming to them and promising the average.


My understanding of these schemes is that the return they promise is too good to be true. That people still invest strikes me as greedy because I think they're enticed by the idea of a quick buck.
   34. PreservedFish Posted: February 16, 2018 at 05:37 PM (#5626257)
Stupid people think that other people are making a quick buck and they're just one or two piece of information short of joining that club.
   35. Curtschillingsdingleberrybatboy Posted: February 16, 2018 at 06:12 PM (#5626268)
Has anyone ever had a friend or relative try to sell them a bunch of high-end knives? If so, you’ve had a brush with Cutco!
   36. Tony S Posted: February 17, 2018 at 08:16 AM (#5626352)
MLM scams are enjoying a golden age right now--Amway was just the beginning--and religious people are their favorite targets.


I'm a bit surprised to hear this, given that I thought there was increased awareness of the practices of Scamway and their ilk. About 20 years ago a coworker tried to get me into Primerica, to the point where I actually attended one of their recruiting events. But the whole thing rang unsettlingly fake to me (I can recognize a painted smile a mile away, and a whole roomful of these Up With People types had my insides screaming) and when I mentioned it later to a friend of mine, he turned white as a sheet and tod me to stay far, far away from those hucksters, pointing out that they're "the financial version of Amway", which was enough negative association for me. When I was a kid some acquaintances of my parents tried to pitch Amway to them, and luckily my dad had more common sense than that. So it was always a stopword in my family.

All this was pre-internet. Today, a few minutes of googling should be enough to steer one clear from these pyramid scams. I'm kind of amazed more people are falling for them than ever before, and it's not a positive reflection on certain religious groups if that's indeed the epicenter of this activity. (For the record, the guy who tried to get me into Primerica was a hardcore fundie.)

   37. You Know Nothing JT Snow (YR) Posted: February 17, 2018 at 10:09 AM (#5626367)
Well, yes, but this isn't limited to churches; the phenomenon is common enough that it has a name:


“Fleecing the rubes.”
   38. Edmundo got dem ol' Kozma blues again mama Posted: February 17, 2018 at 10:10 AM (#5626368)
For the record, the guy who tried to get me into Primerica was a hardcore fundie.


I've often wondered if there is some kind of "need to believe in something greater" urge that would fuel both behaviors at the same time.
   39. PASTE, Now with Extra Pitch and Extra Stamina Posted: February 17, 2018 at 10:14 AM (#5626369)
Well, there is certainly the element that religious people are more apt to believe things without demanding hard evidence, if the presenter is persuasive enough.

But--at least in the cases of most of the MLMers I personally know--it's not so much that they're stupid or naive. A lot of them are quite intelligent in general.

Almost all of them are women with families. Half of them are stay-at-home moms (a lot of them are homeschool moms) and the other half work but would rather be stay-at-home moms. I think they're very susceptible to the MLM siren song of "have your own home-based career!" because they want to be able to make a living while staying home with their kids so very badly (or free their husbands up to work 40 hours a week instead of 60 to pay the bills) that they just mute the rational part of their brain and go with it. It's a powerful emotional appeal for some people.

What actually happens, invariably, without exception, is they almost instantly provoke half the people they know to set their posts on ignore (or outright unfriend them) on Facebook and then end up $500 to $1000 in the hole by the time they fold up the tent. Then they walk away saying (and believing) "It just didn't work out for me" or "I just don't have the right network marketing mindset", because to admit that half the people you know were right and you just got straight up scammed is too painful.

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