There is no such a thing as a free lunch, but we keep on searching for it. In the same way as the alchemist is trying to turn lead into gold. We are able to believe many issues to be right until proven otherwise. So we will have to wait for the lawsuit to get the real story about the personal wealth of Fidel Castro.

But in general you should be skeptic when someone offers you an interest rate quite above the official levels.

Collecting stamps in Spain is still reasonable popular, much more than in other European countries. In the centre of Madrid you are offered a unique impression of little shops around the corner, showing stamps behind the windows.

There is even a fairly big company - Forum Filatelico - that is offering stamps in the construction of a mutual fund. The idea is that you invest some money as you would regularly invest in a fund by adding a monthly payment to such a mutual fund. The fund manager will buy company shares with the payments that are received. And if the rating of the fund (Morningstar) is acceptable and the performance of the fund is reasonable, the fund will experience a positive cashflow.

The formula of Forum Filatelico works about the same. You are to save periodically and this money is invested in a fund, but the collateral is build up by stamps rather than anything else. New cashflow is invested in stamps and this collection serves as a patrimony. Where the performance of a mutual fund will be generated from price increases and dividend (of the underlying stocks) the performance of the stamp fund is generated by...?

The performance will be determined by an increase in the value of the stamps one and secondly by an increase of the other investment (other than stamps).

Strangely enough, the long term trend in stamp values is declining. This could be related to the increase of financial investment and the load of success stories of the last decades. Yet it is still very difficult to determine whether a six to seven percent annual investment return (against two to three for official savings) is extreme. Forum Filatelico is a company with offices in all big cities in Spain. But these are closed for the moment. As is their website (www.forum-filatelico.es). Another interesting fact is that this forum is not even a financial institution which makes it difficult for the clients to get their money back, in the case the alleged fraud is correct.

But this is still a speculation. It may be the case that the police raid of the forum and a related company which happened yesterday is just a mistake. But probably not if you read that a large insurer already in 2004 refused the company as a client.

As for those 350,000 people who are involved they have learned at their cost.

The Spanish Spitting Image, the puppets that caricature the Spanish society (Las Noticias del Guinol) made a joke out of it; "I offered the President of Bolivia to trade stamps for Oil, but he denied."

2006 Hans Bool