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« Wall Street Research and Your Money: What is the Answer? | Main | Sentiment and Reality »

February 28, 2008

Comments

mrstock

Xyber9 is really a tweaked version of the cycle formula that physicist JM Hurst used in 1970. Robert Taylor makes no bones about that; check his website. Remember JM Hurst was acting in an era before computers. What Taylor appears to have done is computerise the logic and monetise it. Try getting your hands on a copy of 'The Profit Magic of Stock Transaction Timing' Traders Press/ JM Hurst for further details and how to do it yourself. It's available for $20 on Amazon! This isn't rocket science, although Taylor would have us believe it.

Mike C

"The key to building a successful investment management business is marketing, and that seems to include making big claims. The consumer is looking for a home run. This usually means looking at what worked last year, and chasing that performance."

I'm not sure this is 100% the case but what do I know as I only have a handful of clients presently.

I think you have to distinguish the potential customer base and the product being offered. I think there might be a difference in expectations between managing separate accounts for the regular guy/gal with a 50K, 100K, 200K IRA account versus a high-octane hedge fund for an ultra-high net worth investor looking for maximum performance.

Since day 1, I've followed a philosophy of underpromise and overdeliver in terms of return expectations and communication of my investment philosophy on a repeated basis, with the thought I want long-term committed investors, not performance chasers who will look for something else after the first 3-6 month bad stretch.

Now I've had a really good 6 month stretch especially compared to the market. Some of my bigger positions are Fairholme Fund, PIMCO Commodity Real Return, Berkshire, Chesapeake Energy, and XTO Energy. Instead of taking this 6 month stretch and trying to imply I can do this every 6 months on a sustained basis, I am seriously thinking about sending out a note that basically says although I'm pleased with recent performance, I absolutely do NOT see it as sustainable over a longer time frame.

I think/hope that most clients appreciate that type of sincerity/honesty and will stick with you during the inevitable 6 month stretch when you underperform.

.....

"Meanwhile, those watching financial television are bombarded with self-serving ads from brokerage firms suggesting that the intelligent viewer can design his/her own trading system with their free software."

I think the vast majority (75 to 90%) of amateur individual investors who go this route will likely find out within a 2-3 year time frame, that it isn't as easy as the advertisements would lead one to believe, and they will be back looking for a good advisor.

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