Friday, December 12, 2008

Say hello to e^x: illustration

Look at this lady talking about her situation.

Ms. Leavitt said she recently discussed her investment with a friend who told her he was suspicious about the firm's ability to generate such profits amid the economic crisis. "I thought, 'He's probably just jealous,' " said Ms. Leavitt. "We've been with [Mr. Madoff] for 15 years, and it's grown every year at 10%."

Really. Mr. Madoff is currently out on bail because apparently he confessed to running a Ponzi scheme worth $50 billion dollars.

Ten percent yearly growth is clearly e^(ln 1.1)x, where x is time measured in years. You know that can't keep happening forever --- even if you wish with all your heart that it was possible. So sorry, but no.

Susan Leavitt of Tampa Bay, Fla., said she had several million dollars of inherited money invested in the firm and added $500,000 earlier this year. A stay-at-home mother with two children, the 46-year-old Ms. Leavitt says she is considering going back to work. "That was my nest egg for the children, and my future. I'll never see much back, I'm sure," she said.

What to say, right? Well, my friend, there you go. Next!

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