EDJ back on top
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[quote=Starka]
It doesn't matter whether you "buy" it or not; it's still true.
[/quote]
So what are you? A mid-cap growth manager? Small cap value? Are you telling me there’s no difference there? Are you a Graham and Dodd guy? A momentum player? Are you GARPy? How do you allocate portfolios across caps and styles, or do you think that doesn't matter? Seriously, what are the odds, given everything else you do and the complexity of the various investment styles and disciplines that you can be a master at all of them?<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
It’s not that I don’t give you credit for skill and talent, it’s just that I wouldn’t give the entire ball of wax to any one manager, much less one that has sales as his primary responsibility. I mean, Kareem was a great player, but I wouldn’t have him bringing the ball up court….
[quote=mikebutler222][quote=Starka]
Frankly, a transactional broker can beat the money managers pretty handily in many cases.
[/quote]
Sorry, I'm not buying that one. Brokers have too many other things to do to beat, year in and year out people who can focus exclusively on money management. You have the further problem of style definition.
Styles go in an out of favor, and who knows when. Are you a large cap growth manager, a small cap vaule guy? An interest-rate sensitive bond buyer. Or do you, possibly worst of all, abandone one style and shift to the next on a whim? Can a great first baseman be a great catcher AND pitcher AND left fielder? It's possible, but I wouldn't bet money on it.
Not to be insulting, but I prefer style pure managers in asset allocation models I can taylor.
[/quote]
Style box, schmyle box. Who the hell gives two sh*ts of a rat's ass? Invest in things that make money. Avoid things that lose money. I am totally with Starka on this one. You and all your style boxes and your tired ass asset allocation story. I can take accounts from that school of thought as fast as you can show can show them to me. "Asset Allocation" is a big pile of steaming doo as far as I'm concerned. Oh, and learn how to spell "tailor".
Starka & Soothsayer,
I think you are both full of it. I'd want to see proof. I have managed portfolios that have a 5 year over 10%, low beta, low std. div, low downside capture, and high upside capture.
I highly doubt you can beat them and take less risk, based on your "Asset Allocation" comment. I like dealing with clients, not crunching numbers and trying to reinvent the wheel.
As for the profanity... grow up, act like an adult.
WOW, how boring..................
Does anybody have a comment on Edward Jones being back on TOP, since it's is the TOPIC?
Any Clones or Drones want to debate the subject?
[quote=iconsult100]
Starka & Soothsayer,
I think you are both full of it. I'd want to see proof. I have managed portfolios that have a 5 year over 10%, low beta, low std. div, low downside capture, and high upside capture.
I highly doubt you can beat them and take less risk, based on your "Asset Allocation" comment. I like dealing with clients, not crunching numbers and trying to reinvent the wheel.
As for the profanity... grow up, act like an adult.
[/quote]
Once again, what you think is meaningless. You want proof? Give me your client list, and let's see how many I take away from you.
Beta, blah, blah, blah. Standard deviation blah, blah, blah. Upside capture, blah, blah, blah. Dude, this is not a video game. This is your clients’ hard earned money. I’m not trying to be an a-hole, but you are too much about the science, and not enough about the art. Stop putting CFAs, and PhDs on pedastals. If I wanted a CFA, I’d have one in less than 12 months. I’ve met many, many jack-offs with CFAs. I wasn’t all that impressed. I’m with Starka. I would start off by asking your client’s what your function is as an advisor–to bottom line it. After about five minutes of open-ended questioning, we would all be in agreement that it is not to plug money into “style boxes.” Monkeys can do that. After five more minutes, you’d be damn lucky to still have the account. Again, clients who have been “asset allocation” lab rats are very easy prey for a sharp guy with a sharp mind who isn’t afraid to use a sharp tongue in critiqueing someone else’s work.
[quote=Player]
WOW, how boring..................
Does anybody have a comment on Edward Jones being back on TOP, since it's is the TOPIC?
Any Clones or Drones want to debate the subject?
[/quote]
Sorry Player, but Starka and I already know that Jones is not for us. Been there, done that, got the T-Shirts which now are used for cleaning up oil spills in my garage.
[quote=Soothsayer]Beta, blah, blah, blah. Standard deviation blah, blah, blah. Upside capture, blah, blah, blah. Dude, this is not a video game. This is your clients' hard earned money. I'm not trying to be an a-hole, but you are too much about the science, and not enough about the art. Stop putting CFAs, and PhDs on pedastals. If I wanted a CFA, I'd have one in less than 12 months. I've met many, many jack-offs with CFAs. I wasn't all that impressed. I'm with Starka. I would start off by asking your client's what your function is as an advisor--to bottom line it. After about five minutes of open-ended questioning, we would all be in agreement that it is not to plug money into "style boxes." Monkeys can do that. After five more minutes, you'd be damn lucky to still have the account. Again, clients who have been "asset allocation" lab rats are very easy prey for a sharp guy with a sharp mind who isn't afraid to use a sharp tongue in critiqueing someone else's work. [/quote] <?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
Sorry, no sale. You have no long term audited track record, no definition of operations, no discernable, definable, repeatable investment philosophy. No bench, no structure. You’re a local guy pumping a lot of hot air about being a stock jock. That and $3 will get you a cup of coffee.
You have no lengthy list of institutional clients. Your promise to “buy things that go up” isn’t enough to garner the attention of sophisticated HNW investors. They’re as concerned about stability and predictability as they are gains. They have no interest in earning this money again and no interest in a guy who believes he’s an expert in every segment and style of investing. If you think asset allocation and risk avoidance is all about “plugging money into style boxes” you haven’t the slightest idea what you’re talking about.
You could rip down your “how I kill in the markets” and I’d turn to the client and ask, “Was Mickey Mantle a great baseball player?” and when they said “of course”, I’d ask why he didn’t pitch. They’d get the message and you’d be on to pitching the “I’m a market king” speech to the next sucker.
[quote=Starka]
It doesn't matter whether you "buy" it or not; it's still true.
[/quote]
I find myself in agreement with you on many issues. On this one we may have to agree to disagree.
Butler222-
You mentioned something about 10% net performance over the last 5 years. If I saw a client who had gotten that with all of the blah, blah, blah, I'd send him or her right back to their advisor. But, let me tell you what I have seen in the last few months:
A married couple who recently sold their business. $1.4 million in assets, 1.5% fee, -1.0% perfromance over the last 5 years. (Client down 5%, advisor up 7.5%)--Smith Barney
A retired airline pilot with $2 million being charged 1.25%. 40% of money was in the money market account, and had been for almost 2 years. 5 year performance was positive 1.1%--Zions Bank Private Asset Management
A husband and wife commercial real estate team with 300K of qualified money in a mutual fund wrap program. 5 year performance was -4.1%--Wachovia
A retired doctor with a $4 million+ portfolio with top advisor in the wirehouse branch. In fact, the branch manager. The doctor's wife has her 300K account with me. (Second marriage for both of them). 5 year number for my client is 12.6% Doc is -2%. Doc coming to see Sooth next week.--Merrill Lynch
The next time I see 10%, I'll PM you and give up. I'm not a "stock jock". I just use my head a little bit. I'm done talking about this.
Butler222-
"You mentioned something about 10% net performance over the last 5 years."
I didn't make that comment, but most every balanced SMA portfolio I've seen lately can show those sorts of numbers. They're really NBD. Small Cap, Deep Value and International managers have done increadbly well the last few years and have carried diversified portfolios.
" If I saw a client who had gotten that with all of the blah, blah, blah, I'd send him or her right back to their advisor."
Then you'd be sending back everyone that had an advisor who really practiced asset allocation.
"A married couple who recently sold their business. $1.4 million in assets, 1.5% fee, -1.0% perfromance over the last 5 years. (Client down 5%, advisor up 7.5%)--Smith Barney"
I'd love to see how any reasonably assembled portfolio could have achieved that performance, but, there are duds in plenty of seats in this business...
BTW, would you like me to share the horror stories I've seen of accounts coming over from both wirehouses and one-man shops where the advisor made big bets on hot sectors, didn't balance an account and blew up clients?
"The next time I see 10%, I'll PM you and give up. "
Sure you will..... Let me give you some help here. If you see a portfolio with Brandes (domestic and/or international) or NWQ small/mid cap, just to name two, hand the statement back the client, save yourself some time, and move to the next opportunity.
" I'm not a "stock jock". I just use my head a little bit."
Golly, and no one else in the business besides you does?
" I'm done talking about this."
Fair enough.
I run my own equity and bond portfolios - you are wrong about hnw
clients, they don’t care if you or xyz is running their money, as long
as you produce. If xyz loses 20%, they blame you, not the manager you
helped pick. Running you rown portfolios also makes the client
stickier and more loyal to you. I would, however not recommend it for
someone with less than 5 years of stock picking experience
[quote=jamesbond]I run my own equity and bond portfolios - you are wrong about hnw clients, they don't care if you or xyz is running their money, as long as you produce. If xyz loses 20%, they blame you, not the manager you helped pick. Running you rown portfolios also makes the client stickier and more loyal to you. I would, however not recommend it for someone with less than 5 years of stock picking experience
[/quote]
You sell performance alone, you lose accounts on performance.
If there's an easy pick-off of accounts it's where your have a prospect with an account with a guy running his own portfolio. I simply ask people in that position if they have some audited returns, what happens to their account if the broker gets hit by a bus, who are the broker's institutional clients, what's his AUM, is he a value manager, growth guy, international? What were his worse three quarters in the last down market. Would they mind firing him and having to start the process of finding an advisor all over again if he slumped. If he's talking to you, opening accounts and having any sort of a life, who's running the account at the very moment?
I wouldn't be so sure that a client is more loyal to you if you're personally running the money because you're only as good as last quarter's numbers. If I have an SMA manager fall flat, he's replaced without cost, the client's still with me. In fact, I've never lost a client over performance, not one.
It's all about perception. Some advisors can do a poor job for the client and because they (client) like and trust that advisor--retain the relationship. Other clients can be doing fantastic with another advisor but, because they feel something is missing from the relationship they move their account.
This is a FAR more important fact than which method of investing might be better than another as far as performance, value..etc, as the "typical" client does not notice the difference nor does he care.
This business is almost entirely about the realtionship between the advisor and his/her client. Performance is one component--but I will argue that's it's far from most important.
Zacko has a very valid point. (sorry to be agreeable). Anyone who has been in this business for any length of time, and has lost, gained and worked with clients, has to agree.
[quote=jamesbond]I run my own equity and bond portfolios - you are wrong about hnw clients, they don't care if you or xyz is running their money, as long as you produce. If xyz loses 20%, they blame you, not the manager you helped pick. Running you rown portfolios also makes the client stickier and more loyal to you. I would, however not recommend it for someone with less than 5 years of stock picking experience
[/quote]
I'm with Bond all the way. You and the manager can keep charging the fees and telling the asset allocation story. But, at some point in time you're going to have to deliver the groceries. It sounds like you are. However, I think you are in the minority. I didn't say "exception to the rule" or anything like that. I think it may be something like 55/45. But, if you think most people with asset allocation wrap portfolios have done 10% annualized over the past 5 years, you're not out prospecting enough.
You either don’t feel confident in your ability or do not want the
responsiblity. As for growth value etc , all of that is hooey.
When does a growth stock become a value stock and vice versa?? Your
growth and value managers hold both. I don’t pigeon hole myself. I go
where I think the best bargains are at that time. Some months there are
many trades, other months hardly any. I never said I sold
performance, that seems to be your hangup, I sell me. As for your
witty retorts ( which I doubt work), the same lines can be used against
you. Each of us has to do the type of business we feel most comfortable
with, there is no right or wrong way.
Jamesbond and Soothsayer are not the same person. I just think they happen to see thing much the same way. I love the one about, “Did Mickey Mantle pitch?” No, Mickey Mantle was the best athlete on the team. Pitchers played every fourth day back then. Centerfielders play every day. Did you ever hear of Magic Johnson? 6’9’’ and could handle the ball, pass the ball, and score. Could play any position on the floor. Even filled in at center one time during the NBA finals. Played pretty good defense, too.