Mob boss calls a stock bubble

Wall Street traders can be shady, Michael Franzese says. Don't let them decide where to put your money.

By MSN Money Partner Aug 21, 2014 2:37PM
Credit: © Jerritt Clark/WireImage/Getty Images

Caption: Michael Franzese former Colombo Family CapoBy Leslie Shaffer, CNBC

Former mob boss Michael Franzese thinks investors should avoid the U.S. stock market. Should you take his investment advice?


"There's a bubble there that's going to burst at some point, and when it does, it's not going to be good," Franzese (pictured), a former mob boss for the Colombo crime family in New York and now an author and motivational speaker, told CNBC.


It's not just the valuations. He's got another reason for advising investors to keep their money off Wall Street.


"I did a lot of things at times with people on Wall Street," said Franzese, who believes there is still a contract out on his life. "A lot of guys are shady and they did shady things with me and I don't trust them. And I don't like other people that I don't know really well taking care of my money. I think that I can do it better."


He advises investing in gold and silver, but if you're thinking about the exchange-traded funds, fuggedaboutit. He likes physical bars.


"No matter what, it's always going to have a value," said Franzese, who dodged a question about whether he'd ever killed anyone. "Unlike stocks, where in our country, you go to sleep, everyone tells you everything is wonderful, you wake up and everything is gone."


To be sure, he doesn't expect financial Armageddon and he still thinks diversification is important, with some caveats.


"You have to have knowledge of what you're diversifying in and not trust somebody else to pick those spots for you unless you know him so well and you have so much confidence and you've done a lot with them throughout the years," said Franzese, who was played by Joseph Bono in the 1990 Martin Scorsese film "Goodfellas."


Should you follow his advice? He has some unusual bona fides.


At the age of 35, he ranked No. 8 on Fortune Magazine's 1986 list of the 50 most wealthy and powerful mafia bosses, believed to be raking in up to $8 million a week at times -- although he told CNBC that if his fortune is still out there, he's not likely to be able to use it. 


"Business is business," said Franzese, who served a 10-year prison sentence on federal racketeering charges. "Whether you're doing it on the street illegally or you're doing it legitimately, there are certain principles that carry both ways."


Franzese has another unusual qualification for giving advice: he's still alive. He noted that out of the 50 bosses on the Fortune list, 44 are now dead and three are doing life in prison without parole. He's believed to be the only surviving high-ranking member of a major crime family to publicly walk away and refuse protective custody.


More from CNBC

130Comments
Aug 21, 2014 3:23PM
avatar
I think he is right on a couple points. The stock market will crash eventually, and a lot of people will get hurt. Another point I agree with, there are a lot of shady characters on wall street. The people that caused the financial crisis are still out there, our Govt. has no interest in prosecuting people, instead our Govt, is more interested in large fines, BofA being the latest, plus the low interest rates, compliments of the Fed, has spawned thousands of Bernie Madoff's. Any investor, would be wise, to make there own decisions vs. a wall street adviser that is more interested, in lining his own pockets, instead of giving helpful advice.


Aug 21, 2014 6:11PM
avatar

Franzese is an insider, he should know. I have heard  from others that were also insiders comment about wall street.

Look at the high speed trading that's taken over how fast the big banks make money using your money. I'll bet those guys really gloat each day when counting up how many people they screwed over and how much money they made. The govt is busy chasing their tails. Just look at the meltdown in 08-09, and nobody went to jail, instead the banks were bailed out with our money......Vote all incumbent congress out of office to start with, maybe that is a small start.  

Aug 21, 2014 3:17PM
avatar
A mob boss, giving investment advice. Sounds trustworthy to me!
Aug 21, 2014 4:31PM
avatar

BEST ADVICE YET. CAN'T TRUST ANYONE THAT WANTS TO HANDLE YOUR MONEY.

Keep it out of the banks and away from the GOVERNMENT.

Aug 21, 2014 6:18PM
avatar
Compared to some of the crooks on Wall Steet, this guy's a rank amature.  
Aug 21, 2014 3:57PM
avatar
He'll make you an offer you can't refuse...
Aug 21, 2014 3:19PM
avatar
Of course he thinks he can do better. Being the neighborhood loan shark, charging payday loan rates, but enforcing it with busted knee caps. So profitable...

Is there an index fund for that?
Aug 21, 2014 6:12PM
avatar

I'd rather know what Katie Upton thinks I should do about investing.  She's done wonders with her assets, and they're real, and they're spectacular.

 

Aug 21, 2014 7:07PM
avatar
Leave the stocks......take the cannoli's.
Aug 21, 2014 6:29PM
avatar

Damn it !  I just moved my money to play hard.  I believe the mob....well time to take it back to safe.

Wall Street has always been and always will be crooked.  You don't get that rich on luck!

Aug 21, 2014 4:54PM
avatar
Way to go Mister Obvious, there's a bubble ready to burst when ever the market goes up and up and up. It's timing and a little bit of good old inside information that makes an investor rich.  
Aug 21, 2014 8:22PM
avatar

I'll bet he gives better advice on making money  than Jim Cramer... Booyah

Aug 21, 2014 5:16PM
avatar
I'm not a mob boss, but I play one on TV.  Anyone that doesn't think we're in a bubble needs their head examined....
Aug 21, 2014 4:51PM
avatar
His opinion is worth - just what it is.....one man's opinion. Same as yours or mine.
Aug 21, 2014 7:00PM
avatar
He may be right.  It wouldn't' take much of an event to cause our economy to go into a downward spiral in the market.  You got to be in it to win it.
Aug 21, 2014 6:52PM
avatar
What's it mean when people tell you what not to do with your money but fail to give you a viable alternative? 
Aug 21, 2014 7:18PM
avatar
I think the mere impression that Wall Street is crooked, validated by a crook, will send the markets crashing tomorrow. The four no-reason-whatsoever UP days we just saw pretty much confirms corruption and manipulation. I hope the Federal Reserve is seized too. 
Aug 21, 2014 5:53PM
avatar
Forget about the the brears and the bulls, take his advice or you sleep with the fish.
Aug 21, 2014 11:02PM
avatar
If he'd gone to Harvard instead of dropping out of Hofstra, he'd be running Goldman Sachs
Aug 21, 2014 5:16PM
avatar
The right way to make money or the wrong way to make money, Taxes or No taxes ?
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

125
125 rated 1
264
264 rated 2
485
485 rated 3
679
679 rated 4
640
640 rated 5
617
617 rated 6
632
632 rated 7
493
493 rated 8
276
276 rated 9
153
153 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
TAT&T Inc9
VZVERIZON COMMUNICATIONS8
CTLCENTURYLINK Inc8
EXCEXELON CORPORATION8
AAPLAPPLE Inc10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.