Tracking positions

Dec 28, 2008 10:37 pm

I may be missing something really obvious, or making it harder than it is–please forgive me if so…

  Having said that---what do you guys use to track and consolidate individual positions? As in maybe hundreds?  Does anyone use a spreadsheet or something?   I have a client that has +5mill in sma's -- we are going to fire the managers, and manage in-house.  Want/need someway to aggregate mutilple positions and accounts in a single place...   I'm on the AGE system if that helps---for the life of me I cant figure out how to get ontrack or any of the other tools to do this..
Dec 28, 2008 11:19 pm

I would ask your tech folks, as surely they must have some resources to help you sort positions from a book - level.  Maybe your quote system also has some tools that allow you to set alerts?  I think there may also be some free tools available on Yahoo Finance.

I use Dorsey Wright, and they give me the ability to set alerts so that when a stock hits a certain price or change in relative strength measurement you get an email as a ‘heads-up’.

What exactly are you looking to track?

For what it’s worth, Bob Dunwoody has suggested for YEARS that most advisors have too many positions.  I think he’s right on when it comes to that.

Dec 28, 2008 11:34 pm

[quote=stocksandblondes]I may be missing something really obvious, or making it harder than it is–please forgive me if so…

  Having said that---what do you guys use to track and consolidate individual positions? As in maybe hundreds?  Does anyone use a spreadsheet or something?   I have a client that has +5mill in sma's -- we are going to fire the managers, and manage in-house.  Want/need someway to aggregate mutilple positions and accounts in a single place...   I'm on the AGE system if that helps---for the life of me I cant figure out how to get ontrack or any of the other tools to do this..[/quote]

You have multiple accounts for a reason. That being said, each position should be in an account for a reason. As such, aggregation fails to recognize these facts. If you're not cut out for the task, refer the client to someone who is.

You're welcome, in advance.
Dec 29, 2008 5:43 pm

guess I didnt explain clearly—

  Does anyone have a spreadsheet that they created to consolidate total positions in one place?   For example---I may have 500 WMT in one acct, and 500 in another, and 250 in another--just looking for something that can tally all positions across all accounts...not very skilled at excel and didnt want to limp through it.   for those that trade across many accounts--how do you track open positions?   thanks
Dec 29, 2008 5:50 pm

LPL allows me to enter a ticker and get all accounts and positions owning that ticker, and to be honest, I don’t think they’re the greatest for program trading by a long stretch, so the AGE system must suck for your purpose.

  As an aside...I'd think long and hard about doing what you are doing.  You're creating a ton of work for yourself and you may well end up backtesting only to discover that you didn't do a bit better than, or even as good as, your SMA managers.  We, and especially clients, tend to develope very negative opinions about the worth of professional money management when we endure the kind of market conditions we've recently endured.
Dec 29, 2008 7:31 pm

SAB, most here have that capability within their workstation. Enter the ticker/cusip and all accounts holding that position are pulled out of the data base. Information includes account name, share position, cost basis, date of purchase, and dates of reinvested divs. This is basic info that’s been available on the workstation for at least 12-15 years. That it is nothing new you should be able to buy a program that will do it for you. My question: Whoever you clear through should have this info available, why aren’t they providing it to you?

  Agree with Dunwoody/Hyman - keep it simple.   Dunwoody- 30 positions max. More is too much to effectively manage. Just a very informed opinion on his part, but good advice.
Dec 29, 2008 8:01 pm

[quote=Indyone]LPL allows me to enter a ticker and get all accounts and positions owning that ticker, and to be honest, I don’t think they’re the greatest for program trading by a long stretch, so the AGE system must suck for your purpose.

  As an aside...I'd think long and hard about doing what you are doing.  You're creating a ton of work for yourself and you may well end up backtesting only to discover that you didn't do a bit better than, or even as good as, your SMA managers.  We, and especially clients, tend to develope very negative opinions about the worth of professional money management when we endure the kind of market conditions we've recently endured.[/quote]   Indy, considering that PMM is built upon Modern Portfolio Theory, wouldn't you agree that, that ship has sailed? While results will vary from account to account, obviously MPT did nothing to prevent major loses in this market decline. Time will tell, but my thinking is that many investors will question why they paid a fee to be left on the tracks as the 5:05 to financial destruction blew their future to oblivion.  
Dec 29, 2008 8:55 pm

If you are with AGE you have a team of Thompson programmers in India at your disposal. Have them make a custom spreadsheet using the ILX DDS functions.

Dec 29, 2008 9:29 pm

[quote=BondGuy][quote=Indyone]LPL allows me to enter a ticker and get all accounts and positions owning that ticker, and to be honest, I don’t think they’re the greatest for program trading by a long stretch, so the AGE system must suck for your purpose.

  As an aside...I'd think long and hard about doing what you are doing.  You're creating a ton of work for yourself and you may well end up backtesting only to discover that you didn't do a bit better than, or even as good as, your SMA managers.  We, and especially clients, tend to develope very negative opinions about the worth of professional money management when we endure the kind of market conditions we've recently endured.[/quote]   Indy, considering that PMM is built upon Modern Portfolio Theory, wouldn't you agree that, that ship has sailed? While results will vary from account to account, obviously MPT did nothing to prevent major loses in this market decline. Time will tell, but my thinking is that many investors will question why they paid a fee to be left on the tracks as the 5:05 to financial destruction blew their future to oblivion.[/quote]   No, I wouldn't necessarily agree that the MPT ship has sailed, and nor would I say that I wholeheartedly endorse it.  If you think having a blended portfolio did nothing to reduce losses, at least in some instances, I'd have to disagree.  One of my core bond funds is PGBOX, which, while nothing spectacular, certainly held it's own in a very tough market and mitigated losses.  True, not all of my bond funds behaved even remotely as well, and true, I don't always use bond funds for that portion of the portfolio...I like individual munis almost as much as you do, particularly now.  At the same time, in smaller accounts and in areas where I lack expertise to select individual bonds (such as high yield bonds), I employ managers.  Every once in awhile, I'll play individual high-yield bonds, but only when I feel like I have a pretty good handle on the situation.  I bought several Ford bonds in 2005 with 2-3 years to maturity and double-digit YTM.  I breathed a sigh of relief when the last one matured in August and reminded myself again why I usually let the professionals pick the securities while I manage the relationship.   Just because MPT didn't work exactly as we expected it to in this bear market, doesn't mean that it's any more dead than buy and hold.  Trust me, I'm right there with several of you in poking fun at things that didn't work for my competitors, but I'm not quite ready to say that just because they didn't work out as planned this time, that they're dead forever.  There's some wisdom in asset allocation and holding good investments for long periods of time and I'm not ready to declare them all dead just because they didn't work so well in a pretty unusual bear market.  Short of cash, treasuries, alternatives such as managed futures, or just shorting the market, there weren't many places to hide this time.  That's not always the case, at least in my experience.  This bear looks kind of like a perfect storm where stocks and most bonds get the crap kicked out of them at the same time.  Lesson there is to go to short and high quality when this kind of bear comes back.   On the fee issue, I may be premature and I may just be fortunate, but I've gotten pushback on fees from less than 2% of my fee-based clients during this bear.  Perhaps I've done a good job of knowing who would be OK and who would buck at high fees in a down market...I don't know.  Maybe I have a book of clients who are just atypical in that regard.  I've never tried to fit a square peg in a round hole, so I have all kinds...fee-based...annuities...brokerage, etc.  Every great once-in-awhile, I have to move someone, but for the most part, they've stayed with their platform.  Others may well have a different experience.  I have a friend in the business who has indicated that he's had to move many fee-based accounts lately, so obviously, results may vary.  My guess is, it's all in the way the account is sold and maintained.  I've been doing a ton of tax-loss harvesting in my Non-qualified accounts and I think people appreciate the effort.   I've rambled on further than I intended to, but I enjoy the discussion and thought-provoking questions.  It's almost like a benevolent Put Trader has re-entered the fray.  Since you put forth the question and I'm always interested in learning, I'd like to hear what your ideas of prudent portfolio management look like these days...
Dec 29, 2008 11:23 pm

[quote=Indyone][quote=BondGuy][quote=Indyone]LPL allows me to enter a ticker and get all accounts and positions owning that ticker, and to be honest, I don’t think they’re the greatest for program trading by a long stretch, so the AGE system must suck for your purpose.

  As an aside...I'd think long and hard about doing what you are doing.  You're creating a ton of work for yourself and you may well end up backtesting only to discover that you didn't do a bit better than, or even as good as, your SMA managers.  We, and especially clients, tend to develope very negative opinions about the worth of professional money management when we endure the kind of market conditions we've recently endured.[/quote]   Indy, considering that PMM is built upon Modern Portfolio Theory, wouldn't you agree that, that ship has sailed? While results will vary from account to account, obviously MPT did nothing to prevent major loses in this market decline. Time will tell, but my thinking is that many investors will question why they paid a fee to be left on the tracks as the 5:05 to financial destruction blew their future to oblivion.[/quote]   No, I wouldn't necessarily agree that the MPT ship has sailed, and nor would I say that I wholeheartedly endorse it.  If you think having a blended portfolio did nothing to reduce losses, at least in some instances, I'd have to disagree.  One of my core bond funds is PGBOX, which, while nothing spectacular, certainly held it's own in a very tough market and mitigated losses.  True, not all of my bond funds behaved even remotely as well, and true, I don't always use bond funds for that portion of the portfolio...I like individual munis almost as much as you do, particularly now.  At the same time, in smaller accounts and in areas where I lack expertise to select individual bonds (such as high yield bonds), I employ managers.  Every once in awhile, I'll play individual high-yield bonds, but only when I feel like I have a pretty good handle on the situation.  I bought several Ford bonds in 2005 with 2-3 years to maturity and double-digit YTM.  I breathed a sigh of relief when the last one matured in August and reminded myself again why I usually let the professionals pick the securities while I manage the relationship.   Just because MPT didn't work exactly as we expected it to in this bear market, doesn't mean that it's any more dead than buy and hold.  Trust me, I'm right there with several of you in poking fun at things that didn't work for my competitors, but I'm not quite ready to say that just because they didn't work out as planned this time, that they're dead forever.  There's some wisdom in asset allocation and holding good investments for long periods of time and I'm not ready to declare them all dead just because they didn't work so well in a pretty unusual bear market.  Short of cash, treasuries, alternatives such as managed futures, or just shorting the market, there weren't many places to hide this time.  That's not always the case, at least in my experience.  This bear looks kind of like a perfect storm where stocks and most bonds get the crap kicked out of them at the same time.  Lesson there is to go to short and high quality when this kind of bear comes back.   On the fee issue, I may be premature and I may just be fortunate, but I've gotten pushback on fees from less than 2% of my fee-based clients during this bear.  Perhaps I've done a good job of knowing who would be OK and who would buck at high fees in a down market...I don't know.  Maybe I have a book of clients who are just atypical in that regard.  I've never tried to fit a square peg in a round hole, so I have all kinds...fee-based...annuities...brokerage, etc.  Every great once-in-awhile, I have to move someone, but for the most part, they've stayed with their platform.  Others may well have a different experience.  I have a friend in the business who has indicated that he's had to move many fee-based accounts lately, so obviously, results may vary.  My guess is, it's all in the way the account is sold and maintained.  I've been doing a ton of tax-loss harvesting in my Non-qualified accounts and I think people appreciate the effort.   I've rambled on further than I intended to, but I enjoy the discussion and thought-provoking questions.  It's almost like a benevolent Put Trader has re-entered the fray.  Since you put forth the question and I'm always interested in learning, I'd like to hear what your ideas of prudent portfolio management look like these days...[/quote]   First, to SAB, sorry for the thread hijack.   Indy, I wasn't pointing my finger at you with my intial response. Just so you you know, nothing personal here. I too defer to managers in areas where i believe I don't have the knowledge to give the client the best investment or when i know i'm not going to get the best execution. High yield is one of those areas. i too have sweated out some Ford Bonds with a piece coming due the first of next month. I still have some GMACs as well. However some of biggests GMAC positions were swap candidates for a client group that needed to offset massive RE gains. I told them "you need loses? You've come to the right effing place!"   Regarding PPM and MPT, I do believe that ship has sailed. Not that it couldn't help, but the whole build a portfolio for managing the portfolio risk/standard dev conversation is now out the window. And that's what PPM is built on.   Here's the way I see it; MPT is backwards looking. It's based on a boatload of stats that were back tested but never put to a real world test. And imho those stats are tainted. How/why? Because the stats are based on market statistics in a non globalized economy. The world is a changed place, even in the 15 years or so since the the theory was developed. Today if China sneezes we all catch a cold. Where as fifteen years ago it was China? China who?   Granted it was us, we ,the USA, who sneezed but the effect has been global. And it has cut across asset classes. There has been a decoupling of traditional relationships within the asset allocation world. This isn't mentioned anywhere as even a possibility. That there wasn't anyplace to hide is because the theory is no longer valid. There are market forces today, powerful market forces at work that were never factored into the oringial work. MPT is about staying fully invested at all times and using diversification as the safety net. That net hasn't worked. The theory is busted because the world has outdated it.   MPT is just that, a theory. Since its wide spread inception it's failed twice to protect investors on the downside. First in 01-03 and now, now. I'm not saying that it is a total failure, just that telling a 60 year old person that they're down only 35% while the market is down 40% is cold comfort to someone who is out of time. How many more failures do we need to experience before we admit that this doesn't work? Yet the majors continue to peddle it for a fee. And of course that's the real story.   Indy, I'm your target market. I'm 56 years old with money to invest. I'd be damned if I'd give my money to someone with a mountain chart and a theory. Especially a theory that hasn't worked. If i were 26, I might i might be tempted because i know i've got plenty of time and i do beleive that themarket will come back and go higher. But at 56 i don't have all that time to dig out of this kind of ditch. I would invest, not for a fee, but buy and hold over long time periods.    
Dec 29, 2008 11:39 pm

Hey BG, if I could show you a way to invest for the long-term with no downside risk GUARANTEED, how much would you be willing to commit to invest with me?  $500k?  $1mm?

 
Dec 30, 2008 12:08 am

OK DK!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

 
Dec 30, 2008 12:28 am

Load all accounts into On Track, run a morningstar snapshot under the reports key.  Done.  Five minutes tops.

Dec 30, 2008 12:29 am

[quote=deekay]Hey BG, if I could show you a way to invest for the long-term with no downside risk GUARANTEED, how much would you be willing to commit to invest with me?  $500k?  $1mm?

  [/quote]   No downside!  That sounds great!  Tell me more!
Dec 30, 2008 12:50 am

[quote=Sam Houston][quote=deekay]Hey BG, if I could show you a way to invest for the long-term with no downside risk GUARANTEED, how much would you be willing to commit to invest with me?  $500k?  $1mm?

  [/quote]   No downside!  That sounds great!  Tell me more![/quote]   Transfer the $ first.  I don't do unpaid consulting.
Dec 30, 2008 12:54 am

And I don’t go on blind dates.

Dec 30, 2008 3:12 am

BG, Indy,
Curious to know - Regading the discussion of MPT dead or alive?, …is this something that came up in your mind(s) as a result of whats happened this year? Did you use MPT to run client portfolios in the past, till this disaster?
And if you did, what are you saying to clients in terms of why you are changing your approach?

Dec 30, 2008 5:46 pm
Sportsfreakbob:

BG, Indy,
Curious to know - Regading the discussion of MPT dead or alive?, …is this something that came up in your mind(s) as a result of whats happened this year? Did you use MPT to run client portfolios in the past, till this disaster?
And if you did, what are you saying to clients in terms of why you are changing your approach?

  The entire fee complex is built upon MPT. 'Let us run the money staying fully invested at all times. We'll manage the risk through asset diversification giving the money to the best mangers money can buy. And we'll do it all for a non conflict of interest annual fee."   To answer your question 01-03 was proof enough for me that as theories go, MPT wasn't up there with other theories, like gravity for instance, in staying power. So, no I don't use it to manage anything.   There is nothing anyone who uses MPT can say to their clients. Well, except for sorry it didn't work, we need another theory.
Dec 31, 2008 1:03 am

I agree with BG, anything that did not work this year should be shunned forever!  Cash and T-bills for all!

Dec 31, 2008 1:22 am
BondGuy:

[quote=Sportsfreakbob]BG, Indy,
Curious to know - Regading the discussion of MPT dead or alive?, …is this something that came up in your mind(s) as a result of whats happened this year? Did you use MPT to run client portfolios in the past, till this disaster?
And if you did, what are you saying to clients in terms of why you are changing your approach?

  The entire fee complex is built upon MPT. 'Let us run the money staying fully invested at all times. We'll manage the risk through asset diversification giving the money to the best mangers money can buy. And we'll do it all for a non conflict of interest annual fee."   To answer your question 01-03 was proof enough for me that as theories go, MPT wasn't up there with other theories, like gravity for instance, in staying power. So, no I don't use it to manage anything.   There is nothing anyone who uses MPT can say to their clients. Well, except for sorry it didn't work, we need another theory.[/quote]

I don't agree with this.  MPT and fee-based portfolios are mutually exclusive.  You don't have to be a Rep to subscribe to MPT.  I think MPT "didn't work" this year because: 1) it didn't take all types of securities available (i.e. alternative investments anyone??); 2) people got stuck in a rut selling pre-packaged-cookie-cutter asset allocation models that and forgot about asset correlation and risk.
Dec 31, 2008 2:23 am

Dont quite understand your statement that MPT and fee based portfolios are mutually exclusive. Why is that? If for example an FA is using SMA’s and does it the right way, he builds an asset allocation based on MPT and plugs in the managers. So you have a portfolio that is based on MPT and is Fee Based.
I am and have been for quite a while, running portfolios in a managed account that i run with discretion. I use ETF’s and some stocks. Theory doesnt run my portfolios, my decisions are based on the environement that we are operating in at any given time. With help from tech analysis along the way (DWA)

Dec 31, 2008 2:37 am

[quote=Sportsfreakbob]Dont quite understand your statement that MPT and fee based portfolios are mutually exclusive. Why is that? If for example an FA is using SMA’s and does it the right way, he builds an asset allocation based on MPT and plugs in the managers. So you have a portfolio that is based on MPT and is Fee Based.
I am and have been for quite a while, running portfolios in a managed account that i run with discretion. I use ETF’s and some stocks. Theory doesnt run my portfolios, my decisions are based on the environement that we are operating in at any given time. With help from tech analysis along the way (DWA)

[/quote]


Did you learn all that neat stuff in your little cfp classes?

Dec 31, 2008 5:33 am
BondGuy:

[quote=Sportsfreakbob]BG, Indy,
Curious to know - Regading the discussion of MPT dead or alive?, …is this something that came up in your mind(s) as a result of whats happened this year? Did you use MPT to run client portfolios in the past, till this disaster?
And if you did, what are you saying to clients in terms of why you are changing your approach?

  The entire fee complex is built upon MPT. 'Let us run the money staying fully invested at all times. We'll manage the risk through asset diversification giving the money to the best mangers money can buy. And we'll do it all for a non conflict of interest annual fee."   To answer your question 01-03 was proof enough for me that as theories go, MPT wasn't up there with other theories, like gravity for instance, in staying power. So, no I don't use it to manage anything.   There is nothing anyone who uses MPT can say to their clients. Well, except for sorry it didn't work, we need another theory.[/quote]   BG, The last bear was 00-02 IMO...by '03 we were on the upswing.  Also, I'd beg to differ that MPT did not work in that bear.  All you have to do is look at a simple global asset allocation fund, like American's Capital Income Builder, which made money all three years, to realize the value of asset allocation.  Just because MPT and asset allocation has been less than completely successful in this bear market is no reason to discard it as a completely invalid theory.  I'm not aware of any strategy that has worked to any significant degree in every bear market ever experienced.  Do we discard the theory of jet propulsion simply becaue once in a blue moon a 747 fails to successfully lift off the runway?   It's fairly obvious that a stock and bond portfolio suffered in this bear market because the root cause was credit issues, which affected bonds when they would ordinarily function as a counterweight to stocks.  Not every bear market will be the same and the next bear could be caused by factors that have little effect on bond portfolio performance. Voila!  MPT lives again!  If you have clients invested in both stocks and bonds, to some degree, you are practicing MPT.  If you don't allocate to both stocks and bonds, I'm curious about what you are investing in and why you think allocating investments into various asset classes is a bad idea.  My intent here is not to create conflict...I really am interested in what your angle is here and I'm looking forward to your input.
Dec 31, 2008 5:37 am

Whether you call it MPT or just plain ole’ “being diversified”, the reason it didn’t work in this bear market is that nearly ALL asset classes were inflated due to easy liquidity and the use of leverage…once the leverage started to unwind all asset classes were hit, with the final shoe dropping in the commodity markets…especially oil.

If you don’t think MPT worked in the 00-02 bear, take a look at the performance of good value managers, especially small value and international value.  If I’m not mistaken, REITS did well during much of that time frame too.

Dec 31, 2008 4:55 pm

One of the underlying messages we are missing here is that there is more than one way to skin a cat in the investment game.  MPT is just one way.  It’s sort of like getting to Houston St. from 158th st.  There’s a few different ways to get there, all in about the same amount of time.  But each employs certain risk, and may encounter certain unforeseen obstacles (traffic jam, accident, construction, etc.).  We know that certain times of the day, different routes are better.  9 times out of ten, the West Side would be better, but on Tuesday the 1st of August, there was a massive jackknifed trailer, and you had now way of knowing it, and sat in traffic for 2 hours.  You could go Broadway/Amsterdam/10th ave., but you know that traffice generally moves slow.  However, if there’s an accident, you can easily cut over to 8th avenue.  I won’t continue, as you get the point.

  Bottom line, you can use MPT, try to time which sectors are in favor, use technical analysis to get in and out of investments (i.e. point & finger charting), use all annuities, use all bonds, use high yielding equities, use hedge fudns or hedgin techniques, use some combination of all of the above, whatever.  But each method relies on the theory always working, on the FA always executing at the right time (or at all), and it also relies on avoiding "black swans" (which is probably the definition of what happened to MPT in our current environment).  Annuities are a real safe alternative, but who's to say that the insurance companies have not over-extended themselves on income guarantees, and that's the next "black swan"?  It's just an example (unlikely), but then again, who would've thunk Bear, Lehman, Merrill, AIG, and Wach would all (essentially) collapse within months of each other?
Dec 31, 2008 8:03 pm

Good point on the black swan.

  BTW, what's a "point & finger" chart...you been in the egg nog again?
Jan 1, 2009 12:32 am

damn fellas—

didnt quite expect to get all these replies....you guys sure are generous with your knowledge and expertise..   on a side--the piss poor performance of the sma managers is the primary reason for the question that started this thread..   anyway--got my answer on the first page--thanks.