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Spitzer, where is the happy median?

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Dec 14, 2006 7:35 pm

"How exactly has he left himself wide open? " Joe

"your posts seem to be written by someone struggling with a second language. Is that the case?" Mike

"I'll let this pass, but just know that you've left yourself wide open." Mr. A

I could have said something like, "Yes, I'm writing in dumbese, which seems to be your native tongue." or something else as snarky. But I decided against.

Did you really need to cut and paste that whole thing to ask me that?

Mr. A

Dec 14, 2006 7:51 pm

[quote=mranonymous2u]"How exactly has he left himself wide open? " Joe

"your posts seem to be written by someone struggling with a second language. Is that the case?" Mike

"I'll let this pass, but just know that you've left yourself wide open." Mr. A

I could have said something like, "Yes, I'm writing in dumbese, which seems to be your native tongue." or something else as snarky. But I decided against.

Did you really need to cut and paste that whole thing to ask me that?

Mr. A

[/quote]

I didn't cut and paste I used the "quote" button which was quite easy actually.  If anything, it was lazy and inconsiderate to my fellow posteres for me to not trim the quote back....
Dec 14, 2006 7:59 pm

[quote=mranonymous2u]“your posts seem to be written by someone struggling with a second language. Is that the case?” Mike

I'll let this pass, but just know that you've left yourself wide open.

Mr. A

[/quote]

The question wasn't intended to be insulting. I'm sorry if it sounded that way.

Dec 14, 2006 8:16 pm

[quote=mranonymous2u] <?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

And yet the stock went down 20+ percent the next day. Sandisk. [/quote]

Being wrong doesn’t mean you weren’t acting in the client’s best interests. It simply means you were wrong.

[quote=mranonymous2u]

Why do you asset gather for money managers?

Why do you buy money managers and not mutual funds? [/quote]

I find I have more control on a number of fronts using money managers over mutual funds. We can discuss this on another thread, if you like.

[quote=mranonymous2u] Have you ever called a client and said "I think we ought to take some profits off the table, let's sell 15% of this money manager's position!" ? [/quote]

 

I weight money mangers by asset class. If an asset class has grown outside of the percentage of the portfolio we’ve set for that asset class, we will take profits and move that money to an undersized manager.

 

[quote=mranonymous2u] Why are your clients paying YOU for work that the money manager is doing? [/quote]

 

We don’t do the same work, but we can save that discussion for another thread.

 

[quote=mranonymous2u] No! I've never heard of a non sequitar. I've heard of non sequitors and the statement that I can only assume you are referring to is far from the definition of non sequitor.  ….[/quote]

 

Actually the word is non sequitur….

 

 

[quote=mranonymous2u]Since you have no idea of the process that goes into trading stocks…. [/quote]

 

Uh, wrong, again. But please do continue….

 

 "Sorry, but none of the above seems to have anything to do with why you wouldn’t, as a matter of basic business practice, regardless of account type, act in the client’s best interest."

 

That's a statement I made, which I stand by. IMHO you haven't explained what's incorrect about it.

[quote=mranonymous2u] What I found with the fee based trading account was that I traded one conflict of interest for a different one.[/quote]

You keep saying that, yet you haven’t seemed to have defined this new “conflict of interest” to the satisfaction of anyone responding to you about it.

Dec 14, 2006 10:16 pm

"I find I have more control on a number of fronts using money managers over mutual funds."

Such as? And do these additional fronts justify the increased fees? I'm sure you think that they do. I'm equally sure that people in the NYS AG's office will eventually beg to differ.

"... we will take profits and move that money to an undersized manager."

You sell your winners to buy more of your losers.

Why? Because you have convinced yourself that this is the proper blah blah blah... The point is that you have convinced yourself. You may think that it is purely a mathematical construct, but you have to have convinced yourself that this construct has validity, and that you, as a portfilio manager/market timer (which is what you are) are going to outperform the s&p 500, even though the vast majority of you guys do NOT. And that's not including the massive fees you charge your clients for this underperformance ("That's not true I outperformed blah blah blah...") And why did you convince youself of this? Because you will be able to make money if you can convince others of it's efficacy. You have a vested interest in convincing yourself. Deny it! I dare you.

Mike, Going over the process of deciding with someone who obviously doesn't have the vocabulary of motivations is showing itself to be pointless. You have a preconcieved (and immature) notion of what "self interest" and "vested interests" mean. You have a non existent understanding of individual perspective(whether one is bullish or bearish by nature). You have a simplistic view of complex problem solving in that you talk in absolutes, things are either 100% this way or 100% that way. You seem to think that the market will always go up and that there is only need for rebalancing of portfolios. You seem to have a self righteousness that is, to me, proof positive of all the above charges. You are internally consistant, I'll give you that.

Will Rogers (among others) is credited with having said, "It's not what he don't know that scares me. It's what he's dead certain of that's just plain wrong!" Unfortunately, in your case, it's both.  

That would be an ad hominem attack, except that I backed the assertion up with evidence and it is a conclusion, not a personal dismissal in lieu of rebuttal.

Mr. A

Dec 14, 2006 10:33 pm

I find I have more control on a number of fronts using money managers over mutual funds.

[quote=mranonymous2u]Such as? [/quote]<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Management costs, gain/loss realization, investment style purity (which leads to better overall portfolio performance), detailed info on holdings, etc..

 

[quote=mranonymous2u]And do these additional fronts justify the increased fees? I'm sure you think that they do. I'm equally sure that people in the NYS AG's office will eventually beg to differ. [/quote]

I won't argue with your Ms. Cleo-type efforts about what the NY Ag's office may someday do on the subject of SMA costs. You seem to be confusing that issue with the fee-in-lieu of commission accounts they went after UBS on. Often SMAs are cheaper than most mutual funds…

 

"... we will take profits and move that money to an undersized manager."

[quote=mranonymous2u]You sell your winners to buy more of your losers.

Why? Because you have convinced yourself that this is the proper blah blah blah... [/quote]

Actually it’s because I relied on Nobel Prize winning studies….

[quote=mranonymous2u]And why did you convince youself of this? Because you will be able to make money if you can convince others of it's efficacy. You have a vested interest in convincing yourself. Deny it! I dare you.[/quote]

If my “vested interest” drove the train I could make more using other approaches.

[quote=mranonymous2u]Mike, Going over the process of deciding with someone who obviously doesn't have the vocabulary of motivations is showing itself to be pointless. [/quote]

IOW, you still haven’t figured out how to explain away (READ: remove your foot from your mouth) about this “conflict of interest” you’ve repeatedly alluded to, but haven’t been able to define.

[quote=mranonymous2u]That would be an ad hominem attack, except that I backed the assertion up with evidence and it is a conclusion, not a personal dismissal in lieu of rebuttal.[/quote]

No, actually what you did is make a statement (flat fee accounts have their own conflict of interest) that you were called on to detail and you've have spent the last ton of bandwidth trying to edge away from.

 As you squirmed, you attempted to deflect attention by claiming I wasn’t familiar with stock trading (which is how I built my business) and from there your inability to express yourself clearly has simply made it obvious that continuing this thread is a waste of time.

Dec 14, 2006 11:37 pm

Mike,

mike mike mike mike. (You) no I have a conflict of interest with a fee based trading account in that MY "greed" side is given more credence than MYfear side when I'm trading stock.  That's what I found when I used the product.

I allowed MYSELF to believe that stocks were going to continue going up. Whereas, with the commission based accounts I was not as willing to let MYSELF be so optimistic.

I had a conflict of interests. I wanted to let the stock go, go, go because I eventually got paid more "when" (as opposed to "if") it did. I wanted to be paid more.

That is a conflict of interests you MORON!

You don't think for yourself, you let others do it for you, and you pick and choose which studies you want to use because of YOUR VESTED INTERESTS I notice you aren't crowing about the myriad studies that say "Put your money in an S&P 500 fund and leave it, you'll outperform almost all investment managers!" I notice you aren't just telling clients to "put your money in Warren Buffet's company and forget about it!" I notice you are not saying that you are using low cost ETF's and CEF's.  I notice you don't espouse the Random Walk Theory! Why not? Because those ideas won't make YOU as much money!

The conflict exists. You obviously can't even admit that it is there so there is no possible way that you can inveigh against it.   Who's worse?

YOU!

I'll be more than happy to let you have the last word on this thread.

Mr. A

Dec 15, 2006 12:19 am

Mike, thanks for not leaving Ms. Cleo out of the discussion. 

Dec 15, 2006 12:22 am

[quote=mranonymous2u]

I allowed MYSELF to believe that stocks were going to continue going up. Whereas, with the commission based accounts I was not as willing to let MYSELF be so optimistic. [/quote]

Last chance for anyone to find some logic in this. Otherwise I'll let it die. It really makes zero sense to me. If someone else can explain it, I'd be interested in just how. I think Joe’s right on this one being “drunk logic”.

[quote=mranonymous2u]I had a conflict of interests. I wanted to let the stock go, go, go because I eventually got paid more "when" (as opposed to "if") it did. I wanted to be paid more. [/quote]

How fortunate that your "conflict of interest" managed to put you on the very same side of the table as the client, since he TOO wanted to see the stock "go, go, go".....What you’re describing is anything but a conflict of interest.

[quote=mranonymous2u] I notice you aren't crowing about the myriad studies that say "Put your money in an S&P 500 fund and leave it, you'll outperform almost all investment managers!" [/quote]

If you think that's what the studies say you haven't read them closely enough.

[quote=mranonymous2u]I notice you aren't just telling clients to "put your money in Warren Buffet's company and forget about it!" [/quote]

See above. Buffet's company and his large cap value approach (like any other) goes through long periods of underperformance against a balanced portfolio containing differing investment styles.

[quote=mranonymous2u]I notice you are not saying that you are using low cost ETF's and CEF's. [/quote]

You didn't ask, but the fact is I use both.

[quote=mranonymous2u] Why not? Because those ideas won't make YOU as much money! [/quote]

As I will detail below, there’s no lack of conflicts of interest in this industry. OTOH, there are plenty of reasons to find one investment philosophy more persuasive (the long running argument between active and passive management, for example) besides personal financial gain

[quote=mranonymous2u] The conflict exists. You obviously can't even admit that it is there so there is no possible way that you can inveigh against it. Who's worse?

YOU![/quote]

It’s amazing how far from the original question you’ve drifted. I never, never said there weren’t various conflicts of interest in the investment business. In fact, I detailed two such conflicts.

The question is just what “conflict of interest” could there be (assuming you know what the term means, and you have a compliance department that isn‘t asleep at the switch) in a fee account since your client wants to see the account increase in size and even your most non-altruistic motivations are served by the very same thing.

I’m beginning to suspect the real conflict here is that in your current position you can’t offer clients that option.

Dec 15, 2006 12:24 am

[quote=skeedaddy2]Mike, thanks for not leaving Ms. Cleo out of the discussion.  [/quote]

When the fake accent fits...

Dec 15, 2006 12:30 am


Happy Holidays!

Dec 15, 2006 12:45 am

Where I'm heading for the holidays

Dec 15, 2006 12:49 am

I like your picture better. Thanks for sharing. I know she’s always on your mind. So, are you heading to Jamaica (fake accent) for the holidays? 

Dec 15, 2006 1:24 am

Hey Mo!,

Did you happen to notice that there was a bear market at around the time I had my experience with the fee based accounts?

Of course you didn't because all that was required was a rebalancing of your managers that were only down 35% into your managers that were down 50%!

Holding stocks and hoping that they are always going to go higher is NOT always in your clients best interests doucebag!

Mr. A

Dec 15, 2006 2:55 am

Hey Mo!,

Yes, Mr Last Word?

Did you happen to notice that there was a bear market at around the time I had my experience with the fee based accounts?

The '98, '99 time period you were talking about?

Of course you didn't because all that was required was a rebalancing of your managers that were only down 35% into your managers that were down 50%!

Actually some were up, none were down anything like 35% (I assume you're talking about 2001 to 2002 and not the up years of '98, '99)

Holding stocks and hoping that they are always going to go higher is NOT always in your clients best interests doucebag!

I guess you're tell me this because you think I said otherwise...

Oh, and the word is "douche bag"

Dec 15, 2006 2:57 am

[quote=skeedaddy2]I like your picture better. Thanks for sharing. I know she's always on your mind. So, are you heading to Jamaica (fake accent) for the holidays?  [/quote]

Nah, further south and warmer...you?

Dec 15, 2006 3:16 am

My wife is looking at NYC, she loves the city during the holidays. But nothing is set just yet.

Further south, hmmm.  Could it be Costa Rica?  That’s where one can score a 15 year old companion for next to nothing? Not that you’re into that sort of thing.  Are the sailfish biting this time of year? My neighbor hooked 17 in one day.

Posers like Mr. A don’t stand a chance against your superior rhetorical skills.

Dec 15, 2006 3:28 am

My wife is looking at NYC, she loves the city during the holidays. But nothing is set just yet.

The weather in NYC, I'm told by family currently visiting, is great.

Further south, hmmm.  Could it be Costa Rica? 

Nope..

 That's where one can score a 15 year old companion for next to nothing? Not that you're into that sort of thing. 

Yeech.....

Are the sailfish biting this time of year? My neighbor hooked 17 in one day.

I'd rather play golf, but perhaps someday...

Posers like Mr. A don't stand a chance against your superior rhetorical skills.

I honestly started that really wanting to know about this conflict of interest in fee based accounts he mentioned (there are a couple, but not that he mentioned). Then he started posting more and I came to think differently about him.... go figure.

Dec 15, 2006 4:26 am

[quote=mikebutler222]Hey Mo!,

Yes, Mr Last Word?[/quote]

...you just knew he couldn't shut up, didn't you?!!