Still, the proceedings were a bit of a letdown. After all the anticipation  some reporters had begun lining up outside the courthouse at 5:30 in the morning  it was a perfunctory affair, completed in an hour. Much of it was legal boilerplate. Mr. Madoff was expressionless throughout; when he read a statement recounting his crimes and expressing “remorse,” he sounded like a man reading a speech he hadn’t bothered to rehearse.

Image Outside of court, Sharon Lissauer said she had lost everything to Bernard Madoff. Credit... Brendan McDermid/Reuters

Judge Denny Chin had made clear that he was not going to allow the Madoff guilty plea to turn into a Wailing Wall for the victims, so most of them stayed away. Though Judge Chin allowed them to speak, he insisted they stick to the issue before the court: whether he should accept Mr. Madoff’s guilty plea. One woman argued that the judge should not and force a trial instead, for the “opportunity to find out where the money is.” But of course there is no money  certainly nothing close to the supposed $60 billion plus he was “investing.” That is the whole point of a Ponzi scheme: the fraudster uses money coming in from new investors to pay old investors, pretending that that is their gain.

Afterward, the TV cameras surrounded a woman named Sharon Lissauer. She had not been wealthy, she said, but she’s lost everything. She didn’t know what she was going to do. She was weeping. It was hard not to feel sad for her  indeed, for all the victims of Mr. Madoff’s evil-doing. But one also has to wonder: what were they thinking?

At a panel a month ago, put together by Portfolio magazine, Mr. Wiesel expressed, better than I’ve ever heard it, why people gave Mr. Madoff their money. “I remember that it was a myth that he created around him,” Mr. Wiesel said, “that everything was so special, so unique, that it had to be secret. It was like a mystical mythology that nobody could understand.” Mr. Wiesel added: “He gave the impression that maybe 100 people belonged to the club. Now we know thousands of them were cheated by him.”

And yet, just about anybody who actually took the time to kick the tires of Mr. Madoff’s operation tended to run in the other direction. James R. Hedges IV, who runs an advisory firm called LJH Global Investments, says that in 1997 he spent two hours asking Mr. Madoff basic questions about his operation. “The explanation of his strategy, the consistency of his returns, the way he withheld information  it was a very clear set of warning signs,” said Mr. Hedges. When you look at the list of Madoff victims, it contains a lot of high-profile names  but almost no serious institutional investors or endowments. They insist on knowing the kind of information Mr. Madoff refused to supply.

I suppose you could argue that most of Mr. Madoff’s direct investors lacked the ability or the financial sophistication of someone like Mr. Hedges. But it shouldn’t have mattered. Isn’t the first lesson of personal finance that you should never put all your money with one person or one fund? Even if you think your money manager is “God”? Diversification has many virtues; one of them is that you won’t lose everything if one of your money managers turns out to be a crook.