Unbelievable returns?

Jun 18, 2009 9:30 pm

Ever make returns that are large enough that you’re no longer comfortable telling a new client what to expect?

  Had a meeting with an endowment committee today. They tore the trades and account apart in pieces, every single trade every single penny. They actually understand what I'm doing to my amazement.   I told them anything less than full boat transactional fees, in a very heavily traded and large account, were not economically feasible for me for the time and effort expended as I had originally offered 1.5%.   They were like bauble heads ok ok no prob. It's nice to feel appreciated.   True story, swear to the big guy.   GOD I LOVE THIS BUSINESS!!!!!!!!
Jun 18, 2009 9:38 pm

Great job, Gaddock.  I’m curious, though:  With these great returns, what is your motivation to stay on the retail side?  Why not take your talents to the institutional side and let someone else handle the rainmaking?  Seems to me you’re in a perfect spot to partner up with a top-notch prospector and absolutely kill it.

Jun 18, 2009 9:58 pm

Huh, never thought about it.

Ron will certainly jump on and give me a hard time for not trading for myself. Ron, I have a valid reason, it's why I trade nothing in my account I do in my clients...

Emotional baggage

Thanks for you thoughts Deekay
Jun 18, 2009 10:15 pm

Emotional baggage ?

Jun 18, 2009 10:20 pm
Ron 14:

Emotional baggage ?

  I trade my accounts cold cool and collect. There is no emotion involved, only planned methodology. That's how I managed to kick it in the big slide.   If I put my own money on the line fear and greed enter the picture.   Kind of like a person that represents them-self has a fool for a client.
Jun 19, 2009 1:31 am

Makes sense

Jun 19, 2009 1:59 pm

Gaddock,

  Not if you're 100% confident in you methodology.   Easier said than done though.
Jun 19, 2009 3:58 pm

What’s unbelievable is that, being as great as you say you are, that your clients aren’t providing you with sufficient ego stroke to the point that you feel the need to come here for additional anonymous stroking.

Jun 19, 2009 4:21 pm

We all like anonymous stroking!!!  

  But the hands better be very womanlike.  Like an actual woman's hands!
Jun 19, 2009 5:59 pm

[quote=jkl1v1n6]We all like anonymous stroking!!!  

  But the hands better be very womanlike.  Like an actual woman's hands![/quote]


If you sit on your hands for 20 minutes, they will go numb. When that happens, clear the snorkel. It will feel like someone else is doing it.
Jun 19, 2009 8:40 pm
YHWY:

What’s unbelievable is that, being as great as you say you are, that your clients aren’t providing you with sufficient ego stroke to the point that you feel the need to come here for additional anonymous stroking.

  Sour Grapes?     
Jun 19, 2009 8:43 pm

[quote=jkl1v1n6]Gaddock,

  Not if you're 100% confident in you methodology.   Easier said than done though.[/quote]   100% confidence in a method? not even close. If you try to trade your own cash with size you'll find out quick what I'm talking about.
Jun 19, 2009 9:32 pm

[quote=Alice Cooper]

[quote=jkl1v1n6]We all like anonymous stroking!!!  

  But the hands better be very womanlike.  Like an actual woman's hands![/quote]


If you sit on your hands for 20 minutes, they will go numb. When that happens, clear the snorkel. It will feel like someone else is doing it.
[/quote]

LAWL!!!!

I'm BerkshireBull and I APPROVE THIS MESSAGE!
Jul 17, 2009 8:58 pm

***Statistics removed, safe to say is was a VERY good month***.

The last few days of market action was a gift from the big guy upstairs. Will somebody please stroke me now?
Jul 17, 2009 9:26 pm

Fill us in on your methodology!

Jul 17, 2009 11:27 pm

Send me a PM

Jul 18, 2009 3:09 am

Yea , that’s what killed me  , trading my own money . 

Jul 18, 2009 11:55 am
stickem:

Yea , that’s what killed me  , trading my own money . 

  Amen to that. Until you trade your $$ with size you wont understand even though you think you do.   Even prop trading for a firm brings emotions to the table that most can't shake. I've found trading as a retail broker has not brought any of the "baggage" into the formula.   If one can trade with no emotion it is a rather large edge over those that do.
Jul 26, 2009 8:02 pm

understandable—you can do it with my money, though…how about that??

  Except you no longer get paid on any trade under $95, right?     seriously, Have you looked at the PIM program?
Jul 26, 2009 9:11 pm

$50 for options and yes I’m trying to get a PIM going but there are AUM and LOA issues that I don’t meet. The 2 managers above me are on board.

  If the client cant take positions that are over $50 in commissions I'll put them in a wrap account otherwise they get killed by commissions.
Jul 26, 2009 10:40 pm

How’d that textbook head and shoulders pattern work out for you?
Perhaps you should re-visit your job description. IT’S A SALES JOB.

Jul 26, 2009 11:17 pm

Not as bad as that bear market worked out for your clients.

Jul 26, 2009 11:24 pm

My clients have weathered the storm just fine due to sensible, balanced asset allocation. I have not lost one single client.
 The difference is, I understand that my job is to generate production. Stick around long enough and you may learn that, too, Newbie.

Jul 26, 2009 11:29 pm
YHWY:

How’d that textbook head and shoulders pattern work out for you?
Perhaps you should re-visit your job description. IT’S A SALES JOB.

  Well that's how you may describe yours. Mine goes quite a bit further than that. I'll bet that's not what you tell you clients.   AS for that head and shoulders pattern I would suggest that are are two trains of thought, one is predictive. Typically they are trying to sell you something. Then there is reactive, those that use the evidence that the market is giving you at this moment and reacting to it. I'm in the reactive field. The market action made a classic H&S no longer relevant. The hedging I used to protect from it is no longer required.
Jul 26, 2009 11:30 pm
YHWY:

My clients have weathered the storm just fine due to sensible, balanced asset allocation. I have not lost one single client.
 The difference is, I understand that my job is to generate production. Stick around long enough and you may learn that, too, Newbie.

    "Weathered the storm"= Only down 28%, look how great I am!!!  I understand my job is to dispense financial advice, production results from such.
Jul 26, 2009 11:36 pm

Jeb, just publish all your trading results, short, intermediate and long term here. Then we’ll compare results and make comparisons. Deal?

Jul 26, 2009 11:38 pm

That was overly, repetitively redundant.

Jul 26, 2009 11:47 pm
YHWY:

Jeb, just publish all your trading results, short, intermediate and long term here. Then we’ll compare results and make comparisons. Deal?

  You are the one claiming your clients "weathered" the bear just fine.  You are the one claiming you haven't lost one single client.  Not to death, moving, unexpected financial need, bear market, not one.  You post yours first.
Jul 26, 2009 11:55 pm

I have not lost one single client during this bear market. I’ve had a couple die, but all had surviving spouses. My (almost exclusively retired) clients’ income has remained stable 9which is their primary concern), and their account values, in many, if not most cases are now above their purchase amounts (I have many very long-term relationships).  My point is simply that selling the idea of always outperforming the markets even to the point of making and never, ever loosing money is a fools’ errand. More importantly, really, really successful FCs simply don’t have time actively managing positions. They are too busy adding clients. If you guys really are trading whizzes, good for you, but you have the wrong jobs.

Jul 27, 2009 12:21 am
YHWY:

I have not lost one single client during this bear market. I’ve had a couple die, but all had surviving spouses. My (almost exclusively retired) clients’ income has remained stable 9which is their primary concern), and their account values, in many, if not most cases are now above their purchase amounts (I have many very long-term relationships).  My point is simply that selling the idea of always outperforming the markets even to the point of making and never, ever loosing money is a fools’ errand. More importantly, really, really successful FCs simply don’t have time actively managing positions. They are too busy adding clients. If you guys really are trading whizzes, good for you, but you have the wrong jobs.

    I could flip my entire book tomorrow in about 10 minutes.  How much time do you think this takes?  I didn't see any investment results in your post.
Jul 27, 2009 12:22 am

[quote=YHWY] My clients have weathered the storm just fine due to sensible, balanced asset allocation. I have not lost one single client. The difference is, I understand that my job is to generate production. Stick around long enough and you may learn that, too, Newbie.

[/quote]



I don’t see it posted anywhere that you haven’t lost any clients. Prove it. If you can’t you’re a liar.

Jul 27, 2009 12:25 am
Moraen:

[quote=YHWY] My clients have weathered the storm just fine due to sensible, balanced asset allocation. I have not lost one single client.  The difference is, I understand that my job is to generate production. Stick around long enough and you may learn that, too, Newbie.
[/quote]

I don’t see it posted anywhere that you haven’t lost any clients. Prove it. If you can’t you’re a liar.

    You can't prove a negative.  I would settle for proof that his clients "weathered the storm just fine".  That is easily proven.
Jul 27, 2009 12:28 am

I’m sorry your book is so minuscule. You are making my point for me in spades.
 You’re the one selling trading results. Every fund and sub-account I sell is required by law to publish its results for everyone to see. Lets’ see your superior results.
 Look, either become a propitiatory trader, fund manager or day trade your own account OR spend your time as an FC gathering assets and producing. There is simply not enough hours in the day to do both at a highly successful level. If you ever meet a legitimate $1 mil producer, (not like the lying posers here) he or she will explain things the same way to you.

Jul 27, 2009 12:28 am

He can prove he hasn’t lost any clients. Easily. Most of those Jones guys (forgive me if you aren’t a Jones guy YHWY) keep printouts of that stuff. Or can get them. Especially an old-timer. I got one every year. Showed you how much you had increased your assets, how many clients you lost, how many you gained, etc. That’s easy to prove. My guess is they haven’t weather jack either.

Jul 27, 2009 12:29 am

[quote=YHWY] I’m sorry your book is so minuscule. You are making my point for me in spades. You’re the one selling trading results. Every fund and sub-account I sell is required by law to publish its results for everyone to see. Lets’ see your superior results. Look, either become a propitiatory trader, fund manager or day trade your own account OR spend your time as an FC gathering assets and producing. There is simply not enough hours in the day to do both at a highly successful level. If you ever meet a legitimate $1 mil producer, (not like the lying posers here) he or she will explain things the same way to you.

[/quote]



We’re not Investment Companies. We only have to report results to our clients.



Publish your record of client retention. No?

Jul 27, 2009 12:34 am

How would you like my record of client retention?

Jul 27, 2009 12:52 am

.pdf will work. unless you can put it in either Pages or Numbers

Jul 27, 2009 1:00 am

Right… I’ll shoot a list of my clients right out. How stupid are you?
 Look, either prove your ridiculous claims of market timing or shut up. Either way, my own knack of prognostication sees a career change in your future. The good news is,  if you’re not a liar, you could still get rich…just not in our business. Your manager will be explaining this to you in detail.

Jul 27, 2009 1:17 am
YHWY:

Right… I’ll shoot a list of my clients right out. How stupid are you?
 Look, either prove your ridiculous claims of market timing or shut up. Either way, my own knack of prognostication sees a career change in your future. The good news is,  if you’re not a liar, you could still get rich…just not in our business. Your manager will be explaining this to you in detail.

  I have not made any ridiculous claims of returns.  You are the only one in this conversation that has mentioned client performance.  I simply took your request of posting client returns and turned it around.  I take your response (or lack thereof)  to mean you won't be posting any type of proof for your statements, and therefore will stop challenging others to do the same.  Yes? 
Jul 27, 2009 2:03 am
YHWY:

Right… I’ll shoot a list of my clients right out. How stupid are you?
 Look, either prove your ridiculous claims of market timing or shut up. Either way, my own knack of prognostication sees a career change in your future. The good news is,  if you’re not a liar, you could still get rich…just not in our business. Your manager will be explaining this to you in detail.

  I would love to have a list of your clients. I'll even set up a commission split agreement if possisible
Jul 27, 2009 9:40 am

[quote=YHWY] Right… I’ll shoot a list of my clients right out. How stupid are you? Look, either prove your ridiculous claims of market timing or shut up. Either way, my own knack of prognostication sees a career change in your future. The good news is, if you’re not a liar, you could still get rich…just not in our business. Your manager will be explaining this to you in detail.

[/quote]



Wow, you’re stupid. Have you not noticed on these boards - I own an RIA. I don’t have a manager. But that must be your world, the employee world and that’s all you know. Like all you know is selling.



Well, I guess if you can’t prove it by posting, you must be lying.



The good news is, that there are still stupid people out there who would rather listen to a financial psychologist than a financial advisor, because people are easily sold.

Jul 27, 2009 9:02 pm

[quote=YHWY] Your manager will be explaining this to you in detail.
[/quote] 

My manager is very happy with what I'm doing. As for your number one concern, production, I'll just break $250 large TTM this last month of year two. My goal was $200 so I'm happy.    Next year I'll do over $400 large and $30 million AUM.
The best way to prospect is to find a couple wealthy people and make good money for them... and they will come. Birds of a feather flock together
 
Jul 27, 2009 9:07 pm
The best way to prospect is to find a couple wealthy people and make good money for them… and they will come. Birds of a feather flock together [/quote]



Gaddock you are wasting your breath. Guys like him don’t believe in making people money.
Jul 27, 2009 10:14 pm
Moraen:

Gaddock you are wasting your breath. Guys like him don’t believe in making people money.

  I think he's more jaded and has lost spirit. If you have to count on others to make the money for you I can see what a kick in the boys the last year and 1/2 must have been like. Smartest guys in the world got killed. Even in my office I think me and one other guy are the only ones that went short through the slide. Can you imagine being in mutual funds that can only go long?? OUCH!   If this job was only about production I would quit. If that's what it was all about how could one look into a persons eyes with honesty???? Not me. I consider the market the ultimate game of chess and or strategy. I love the game and it turns out I'm good at it AND it pays VERY WELL. What else could a guy ask for?    
Jul 27, 2009 10:19 pm

My clients and myself are in long only mutual funds and have continued to buy every two weeks the entire way down. It isn't bothering me a bit. To each their own.

Jul 27, 2009 10:28 pm

Ron14- Expand your thinking and protect your clients…

Jul 27, 2009 10:32 pm

[quote=Ron 14]

My clients and myself are in long only mutual funds and have continued to buy every two weeks the entire way down. It isn't bothering me a bit. To each their own.

[/quote]   I hear you Ron. What do you tell HNW accounts? Safe bet you don't recommend DCAing into long only mutual funds. I think the size of the accounts you are brining in are commensurate with the products you recommend.
Jul 27, 2009 11:48 pm

I am not going to change my philosophy because some guy has 2mil and another guy has 250k. Obviously every investors needs are different and I do use real estate, commodities, and bonds in portfolios, but long equity positions are the core.

Jul 28, 2009 12:12 am
Ron 14:

I am not going to change my philosophy because some guy has 2mil and another guy has 250k. Obviously every investors needs are different and I do use real estate, commodities, and bonds in portfolios, but long equity positions are the core.

  I hear you. A foundation was recently referred to me and I put together a plan that was in-line with a rather large sum of $$ in it. These people were very VERY sharp. If I would have suggested putting it into mutual funds I would not have the account. There is a GIANT difference between a $250k, where a MF may be appropriate and a 2 million account where IMHO they are not. They are simply another layer of fees to pay, not to mention you don't really know what they are buying and selling real time and if there is style drift you don't know it until after the fact. It seems to me that you have no accredited investor accounts or your tune would be a bit different.    BUT what ever blows up your skirt.
Jul 28, 2009 2:15 am

At a certain $ amount mutual funds won't provide the optimum mix of equities. I am not saying I use 100% mutual funds, but since a majority of my clients are in the 50-150k range I use funds and ETF's the most. What I am saying is my investing philosophy isn't going to change depending on the dollar amount. Nor am I going to preach some market timing strategy that can't be repeated in order to win an account because it will impress "an accredited" investor. The first time you miss that account is gone.

Jul 29, 2009 8:51 pm

Who's strategy is market timing? not mine. The guys that run the mutual funds you invest in?

Jul 29, 2009 9:18 pm

No not yours, Jebediah.  All mutual funds suck, I know, I know.

Jul 29, 2009 10:10 pm

I did not say that.

Jul 31, 2009 10:07 pm

My best efforts account is up XX.XX% net of fees since Jan, 1.

  How did MF DCAing work for you?
Jul 31, 2009 10:11 pm

My best account is up 100% since Jan 1. Selling the 45 call every month on JPM stock.

Jul 31, 2009 10:29 pm

My best account is up 140% buying BAC at $5/share lol

Jul 31, 2009 10:52 pm

You have me beat !!

Jul 31, 2009 11:04 pm
Gaddock:

[quote=Ron 14]I am not going to change my philosophy because some guy has 2mil and another guy has 250k. Obviously every investors needs are different and I do use real estate, commodities, and bonds in portfolios, but long equity positions are the core.



I hear you. A foundation was recently referred to me and I put together a plan that was in-line with a rather large sum of $$ in it. These people were very VERY sharp. If I would have suggested putting it into mutual funds I would not have the account. There is a GIANT difference between a $250k, where a MF may be appropriate and a 2 million account where IMHO they are not. They are simply another layer of fees to pay, not to mention you don’t really know what they are buying and selling real time and if there is style drift you don’t know it until after the fact. It seems to me that you have no accredited investor accounts or your tune would be a bit different.



BUT what ever blows up your skirt.[/quote]



Can you give us a general idea what makes up an account of this size since you are not using funds… percentages (23% options, 18% etfs, 26% individual stocks…etc) don’t need actual holdings
Aug 1, 2009 12:22 am

I’ve given out bits and pieces of info that if you searched you could find your answer. If you want detail on this account PM me.

  As for the account I spoke of above "best efforts". It's one of my largest accounts that I've taken hundreds of positions in it this year. It's not a small lucky account. Its an endowment account that has been giving me lots of referrals. It's one of the accounts that gets my greatest attention and best effort. They are paying full boat transactional to insure they get just that. Very sharp people that are interested in net gains not fees.
Aug 1, 2009 2:15 am

Hundreds of positions? So what 200 positions to get to 50% ? .25% gain a position ?

Aug 1, 2009 12:40 pm

sorry posted it twice somehow

Aug 1, 2009 12:45 pm
Ron 14:

Hundreds of positions? So what 200 positions to get to 50% ? .25% gain a position ?

  If you are seriously asking Ron, the options positions I write around the equities in the account, or revenue puts that don't have an equity position, average about 1.4% per expiration as the positions will have a Delta the -15 or lower. Merger plays are even higher but have a much higher delta, no big surprise. Like X*X one might consider a $5 strike as the deal is for $5.50 a share. If I'm trying to acquire the stock I'll write them with a Delta in th -35 area. More often than not it takes several expirations before we get the stock and the credits from the puts are greater than the movement in the equity. I'll use that same technique and a stop when exiting equity position unless it's gone vertical like O*O We just sold it outright and wrote another put hoping to buy it back at 25 - the credit received. If it's a stock that's well above basis like X*Z for example getting into it with a $20 put. NOW I've written a spread around it with a stop above the put strike. That is a truly neutral position. Don't care where it goes in any case we win.   (Tickers have been changed to protect the innocent.)
Sep 18, 2009 9:38 pm

Another month and the same

Oct 17, 2009 12:55 pm

Another month and the same. Got to love it.

Oct 29, 2009 5:15 am

Hey Gaddock,

Hey thanks for sharing your successful techniques, hopefully your “paying it forward” karma is filling up!

but  did you say you never purchase options at all? Mainly writing? And when writing options, is it rarely naked or mostly as a hedge against an equity position? You mentioned a revenue option is that just selling naked puts.

And so you are effectively writing options at a stocks support and resistance level? Or in this market selling puts as the dollar collapses and covering  dollar bounce.

Nov 10, 2009 3:07 am

hehehe my comment just completely killed this discussion…


I’ll remember to make sure future posts are witty, non pc and have some bite…


Nov 10, 2009 11:23 pm
JP:

Hey Gaddock,

Hey thanks for sharing your successful techniques, hopefully your “paying it forward” karma is filling up!

but  did you say you never purchase options at all? Mainly writing? And when writing options, is it rarely naked or mostly as a hedge against an equity position? You mentioned a revenue option is that just selling naked puts.

And so you are effectively writing options at a stocks support and resistance level? Or in this market selling puts as the dollar collapses and covering  dollar bounce.

  I'm glad you are able to find some of this info useful. Never say never, when I do it's almost always as a hedge in a spread or revcon. Many times I'll sell naked puts but they must meet several conditions and a probability of 85% or better. And yes the criteria does include stocks support and resistance levels and where the dollar is. I like to have 5 confirmations of the same outcome before pulling the trigger. I filter tens of thousands of positions to find one I'll take a position in.
Nov 10, 2009 11:43 pm
JP:

hehehe my comment just completely killed this discussion…


I’ll remember to make sure future posts are witty, non pc and have some bite…


  Sounded like a good post to me, unless I'm missing something.
Nov 22, 2009 4:38 am

[quote=Gaddock]Ever make returns that are large enough that you’re no longer comfortable telling a new client what to expect?

  Had a meeting with an endowment committee today. They tore the trades and account apart in pieces, every single trade every single penny. They actually understand what I'm doing to my amazement.   I told them anything less than full boat transactional fees, in a very heavily traded and large account, were not economically feasible for me for the time and effort expended as I had originally offered 1.5%.   They were like bauble heads ok ok no prob. It's nice to feel appreciated.   True story, swear to the big guy.   GOD I LOVE THIS BUSINESS!!!!!!!![/quote]     I'm talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, buddy. A player. Or nothing.
Nov 22, 2009 1:47 pm

Another expiration with several hundred positions expiring.  A few were acquisition positions the others expired. Only one actual loss. Bought it back just out of the money for a few hundred down. 

All in all HUGE month again.
Jan 14, 2010 11:52 pm

OK here it is …

  2009 average returns in the account that I activly manage.   (drum roll t t t t tt t  tttt ttt t  t ttttt tttttttt    tttt ttttt )   Get ready for BigKahuna to flip out and scream lies lies lies  he he he.   60%+ with a .57 Beta.   Da da da DAAAAAAAAAAA   Du du du du DAAA DAAA DUHHHHH du du du.   I'll post my expiration stats tomorrow. It's the biggest month I've had yet BUT I've not yet heard the closing bell.
Jan 15, 2010 9:38 pm

Expiration day …

  243 positions expired out of the money and two planned acquisitions. The largest month I've had yet.