Cold Calling - Can You Get Large Accts?

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Oct 1, 2009 9:51 pm

Or one of them owns a McDonalds and makes 200% in one year, blowing Gaddock out of the water

Oct 1, 2009 11:40 pm

[quote=Gaddock]"Flip to page 5 on the jp morgan guide to the markets…“Ok mr. client, if you could invest your money here or here, where would you put it?” "

  I would put it with a guy that was referred to me by the endowment committee chairman, a guy who has a strategy that puts your money to work. He has lower fees and much higher returns with half the markets risk, a guy named Gaddock [/quote] The thing I like about that guy Gaddock is how gosh darned humble he is.  
Oct 2, 2009 7:45 am

[quote=Moraen] [quote=Otane]

Thanks for tip on the bonds. Largest producer in the office is all bonds as well, and being a former CTA I am going that route as well. No need to have clients get stomach aches with the volatility of equities.
 
 [/quote]

Otane - what happens when all of your bond clients' friends are getting 70% returns over at Gaddock's office? What do you think they are going to say to you?

Or even Ron's clients' average 8-10%/yr?[/quote]   I know you are directing this at otane, but, is this a serious question? Because, as someone who does more than his fair share of bond business I'm reading this as a joke. I'm right, right?
Oct 2, 2009 8:35 am

[quote=BondGuy] [quote=Moraen] [quote=Otane]

Thanks for tip on the bonds. Largest producer in the office is all bonds as well, and being a former CTA I am going that route as well. No need to have clients get stomach aches with the volatility of equities.



[/quote] Otane - what happens when all of your bond clients’ friends are getting 70% returns over at Gaddock’s office? What do you think they are going to say to you? Or even Ron’s clients’ average 8-10%/yr?[/quote]



I know you are directing this at otane, but, is this a serious question? Because, as someone who does more than his fair share of bond business I’m reading this as a joke. I’m right, right?[/quote]



BG - my point is if he’s worried about his clients’ tummy aches over a little volatility and only limits the volatility by buying bonds, he’s going to have those same clients’ wonder why they aren’t getting the same returns as their friends who are investing across the spectrum.



Now, your clients may be different, as you have likely educated them over the course of several years. And I realize that you can make some good money trading bonds, but I’m not sure that’s what Otane is talking about.



Oct 2, 2009 9:00 am

Clients forget about the amount of risk they may take when the markets go up and then blame their advisor when they lose money during a selloff.

  Better to have a risk coversation upfront and keep referring to it during reviews so that clients understand the what and why of what you are doing. 
Oct 2, 2009 11:09 am

[quote=Moraen] [quote=BondGuy] [quote=Moraen] [quote=Otane]

Thanks for tip on the bonds. Largest producer in the office is all bonds as well, and being a former CTA I am going that route as well. No need to have clients get stomach aches with the volatility of equities.
 
 [/quote] Otane - what happens when all of your bond clients' friends are getting 70% returns over at Gaddock's office? What do you think they are going to say to you? Or even Ron's clients' average 8-10%/yr?[/quote]
 
I know you are directing this at otane, but, is this a serious question? Because, as someone who does more than his fair share of bond business I'm reading this as a joke. I'm right, right?[/quote]

BG - my point is if he's worried about his clients' tummy aches over a little volatility and only limits the volatility by buying bonds, he's going to have those same clients' wonder why they aren't getting the same returns as their friends who are investing across the spectrum.

Now, your clients may be different, as you have likely educated them over the course of several years. And I realize that you can make some good money trading bonds, but I'm not sure that's what Otane is talking about.

[/quote]   It is a matter of getting clients with the same mindset, and I think during these times it won't be difficult. There will always be someone with a greater return or drawdown - I am not going to worry about it.   Having been a CTA and managed over 30 million at one time, I had clients that I thought were use to the volatility of commodities - I was wrong. So, I understand the mindset of the most "sophisticated" investor.    
Oct 2, 2009 11:23 am
Moraen:



BG - my point is if he’s worried about his clients’ tummy aches over a little volatility and only limits the volatility by buying bonds, he’s going to have those same clients’ wonder why they aren’t getting the same returns as their friends who are investing across the spectrum.

Now, your clients may be different, as you have likely educated them over the course of several years. And I realize that you can make some good money trading bonds, but I’m not sure that’s what Otane is talking about.

  OK, so you guys are having a cross thread conversation because I'm not reading anything about volatility in this thread?   I buy fixed income, mostly tax free bonds, not as an asset allocation, but as an income generator. I'm specifically looking for prospects who want income. Not being everything to everybody is a simple business with huge rewards. And few worries. Still, over the years I've amassed  large equity portfolio of equities.    Let's talk about the spectrum for a moment. Well, at least the equity portion. Up until 2003 my equity pitch went something like this: The stock market bottomed after the great crash in July of 1932 at 41. Since then it's done nothing but go higher. And, every time it's gone down, that is every time, it's come back and gone higher. Stocks need to be an important part of your portfolio.   Sounds good huh?   And it's totally true. Factually correct. The best type of material for a stock selling advisor.   However, there is a back story. It took until 1954 for stocks to reach their pre-crash level. That's 25 years to get even. For those who did hold, that's a long time. Of course it was nothing but good news for those who were fortunate enough not to have been invested during the crash and had the dough to invest in the up legs over the coming 25 years. Still, think about that, 25 years? At the time for anyone 40 years old, that was a lifetime. A lifetime just to get your money back. No growth, no inflation hedge. Just getting all the hard earned money you put in back.   Now let's spring forward to the present. I no longer use my "Stock Pitch" because it's no longer valid. The markets haven't "Always come back." They may but so far this decade, they haven't.   There is a big case to be made that the environment for stocks is changing. And, not for the better. Looking back over the past 25 years, what fueled the great stock run of that time? If you answered baby boomers you are correct. With a big lift  from the Reagan admin with the advent of the 401K. Or was it Carter? The boomers fued the great stock boom of the past three decades. Now as the boomers move to another phase of their lives, equites will play a less prominent role. Year by year less boomers are in the accumulation phase. That was coming regardless of market action. But let's look at market action. Two stock market debacles inside of 8 eight years! Many boomer's stock portfolios are reduced to 1990's levels. Especially those who bought into the "just buy the index mantra" that permeated the nineties. And again, regardless, boomers have had enough. Many have lost faith in the equity markets. That's what fraud will do. And, in that way, this time is different. Add in the governement setting aside the law and wiping out entire classes of investors, from shareholders to preferred share holders and even bond holders as they "apply the greater good" theory, and the trust that boomers had in the stock markets is left as a puddle of tears on the floor.   The combination of boomers reaching retirement age, few safe havens for investment causing a loss of faith, and much smaller follow on generations with much less buying power all are cause to rethink the "Equities always come back" equation. I personally think that equities will come back. But over such a long time period, and with a risk factor that makes them all but useless as an inflation hedge.   Yet, advisors use the same tired and outdated tools to allocate to stocks. And many have already forgotten the lessons of just a year ago.