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Originally posted by Shakka In theory. Try managing money for other people and then tell me what a down year means! If you want to own a business, buy the debt. The stock is just a side game for speculators.

Those people should know what they're in for. In my prospectus, I would make sure they were informed about the specific strategy employed, and that the fund is designed for investors willing to hold for at least 3 years or more. If they want short-term gains, they should look elsewhere.

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but the upside of owning a stock is that it's liquid, you can get rid of it any time you want. a corporation has assets that are highly illiquid, and even if you did get rid of it most likely it would be sold at fire sale prices. imagine of warren buffet employed a simple rule like only buy fundamentally strong stocks that have moved above their 200 ma. he would be MUCH MUCH MUCH richer. I've read one of his books. He often talks about double baggers, triple baggers, etc. A simple move above the 200 MA in a bear market would only mean missing a small part of the move. I also have a book by peter lynch. Read em both can't remember the titles. These guys picked great companies that were sold off in bear markets and rode them through bull markets. Buy low, sell high, seems like a great idea - common sense. But Buffets ignorance toward market timing brushing it off as an impossible task is somewhat shocking.

Even though stocks are liquid and an easy trading instrument, that still doesn't take away from the fact that a stock represents a part of the business. Few investors think of a stock in that way. For the value investor, this is good because we can take much better advantage of a value opportunity than a growth investor can, because when it comes down to it, everyone is a growth investor these days. It's growth investors who fuel bubbles (i.e. tech bubble) in my opinion.

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Originally posted by Krypton Those people should know what they're in for. In my prospectus, I would make sure they were informed about the specific strategy employed, and that the fund is designed for investors willing to hold for at least 3 years or more. If they want short-term gains, they should look elsewhere.

No doubt. We try to tell everyone that invests in our fund that we manage money over a full economic cycle with less risk and less stomach churn. However, investors are a fickle bunch that want immediate gratification. Even worse is when you have a streak of good performance, you get a bunch of hot-money momentum chasers piling in which feels nice at first as your asset base goes up but then they bail out at the first hint of weakness.

There's nothing wrong with your idea--it's absolutely right in theory. I'm just telling you from experience how a lot of investors behave. Don't get me wrong, we have a nice base of long-term investors that have been with us for years and have profited handsomely for their patience. However I've seen tens of millions come and go in the blink of an eye because most people don't want to take the time to read a full prospectus (let alone an SAI) to really understand what they're buying. It's just the way a lot of people (at least in this country) seem to think. From a money management perspective it is frustrating as hell. However, most people aren't going to turn away new money either. It just goes with the territory.

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Even though stocks are liquid and an easy trading instrument, that still doesn't take away from the fact that a stock represents a part of the business. Few investors think of a stock in that way. For the value investor, this is good because we can take much better advantage of a value opportunity than a growth investor can, because when it comes down to it, everyone is a growth investor these days. It's growth investors who fuel bubbles (i.e. tech bubble) in my opinion.

Everyone just wants to make money. There are just differences in philosophy and strategy. In the end it's just about the money though.

What mutual fund do you help to manage? Do you guys hire stock analysts or do you outsource to a research firm? I'm asking because I'de rather not be the one to manage/trade the capital. I just want to tell the money manager what is good and what isn't. He can do whatever he wants with my advice.

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Originally posted by Krypton What mutual fund do you help to manage? Do you guys hire stock analysts or do you outsource to a research firm? I'm asking because I'de rather not be the one to manage/trade the capital. I just want to tell the money manager what is good and what isn't. He can do whatever he wants with my advice.

Can't tell you which specific fund, but we're a small fund by all standards. About a $230M long/short fund. We generate some of our own ideas and we have a lot of sources be it sell-side analysts we like or small boutique research firms or other contacts. We handle our own trading. You basically want to provide boutique research services and get paid for that without having any of your own money at risk.

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Originally posted by Shakka Can't tell you which specific fund, but we're a small fund by all standards. About a $230M long/short fund. We generate some of our own ideas and we have a lot of sources be it sell-side analysts we like or small boutique research firms or other contacts. We handle our own trading. You basically want to provide boutique research services and get paid for that without having any of your own money at risk.

How do potential investors discover your fund? Is it by referral only? What would be the reason a mutual fund might want to keep its name secret? I'm not offended or anything, I just want to know how it all works.. Oh, and how did you find the job?

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Trouble at Bank of America!

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Reuters Bank of America gets subpoenas, reports SEC probe Thursday August 7, 4:35 pm ET NEW YORK (Reuters) - Bank of America Corp (NYSE:BAC - News), the largest U.S. retail bank, said on Thursday that it has received subpoenas and requests for information from federal and state government agencies over auction-rate securities. The Charlotte, North Carolina-based bank also said it has received subpoenas, interrogatories or civil investigative demands from a number of state attorneys general regarding municipal derivatives transactions from 1992 to the present. Bank of America said it is cooperating on both matters. Separately, the bank said Countrywide Financial Corp, the mortgage lending giant it acquired last month, has responded to subpoenas from the U.S. Securities and Exchange Commission, and that the agency is conducting a formal investigation. Bank of America disclosed the various regulatory matters in its quarterly report filed with the SEC.

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Originally posted by Krypton What mutual fund do you help to manage? Do you guys hire stock analysts or do you outsource to a research firm? I'm asking because I'de rather not be the one to manage/trade the capital. I just want to tell the money manager what is good and what isn't. He can do whatever he wants with my advice.

you seem like a really smart kid, but somewhat impatient (based on other comments). I mean, it's good that you have ambition and a defined plan, but realize that a career is a long road. Make sure that you don't take short cuts to achieve your goals. While some people certainly succeed on a shorter path, far more people don't succeed. To ensure your future success, you just need to bang out the good grades in school to set your self up for a nice internship/entry-level-job in a big bank. After that, a top MBA is a well traveled road for people with your desires. There are many ways to get to the destination, but the easiest way is to work hard in school. BTW....don't underestimate the importance of an internship with a bank in the bulge bracket.

sorry for the rant, this wasn't specifically in response to this post but the various posts you make about careers.

EDIT: i say big bank because it's much harder to work your way up than it is to work your way down. Beginning your career at Goldman (even if that isn't your goal) will provide much greater access to other jobs later on. Thus, starting at the top is a much better strategy.

Last edited by jerZ07002 on Aug-07-2008 at 22:22

Fannie Mae reports tomorrow
expect blood.

Jim Rogers tells people to be farmers and not get MBA's. I wonder if his daughter will be a farmer. LOL. Yeah right, farmer in Singapore my ass.

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Here's our Fast Money Final Trade. Tomorrow's best trades, right now! Jeff Macke believes its time to take some Walmart WAL MART STORES INC WMT 56.96 -3.80 -6.25% NYSE Quote | Chart | News | Profile [WMT 56.96 -3.80 (-6.25%) ] off the table. Guy Adami quickly says "ANF" for Abercrombie ABERCROMBIE & FITCH CO ANF 49.80 -5.93 -10.64% NYSE Quote | Chart | News | Profile [ANF 49.80 -5.93 (-10.64%) ]. Karen Finerman passed on making a final trade. Joe Terranova suggested U.S. Steel UNITED STATES STEEL CORP X 143.51 -0.83 -0.58% NYSE Quote | Chart | News | Profile [X 143.51 -0.83 (-0.58%) ]. See other "Fast Money" Final Trade posts.

hahaha. The problem with them is that they are applying fundamental ideas to short term trades.

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soulful/latin/deep house + jazz

Last edited by mndeg on Aug-07-2008 at 22:33

Jim Rogers cracks me up. He is so right on and pulls no punches. Moved his family to Singapore so they could learn to speak Chinese!

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Originally posted by Krypton How do potential investors discover your fund? Is it by referral only? What would be the reason a mutual fund might want to keep its name secret? I'm not offended or anything, I just want to know how it all works.. Oh, and how did you find the job?

We do an admittedly poor job of marketing ourselves--it's probably our biggest weakness. It's not by referral--we're an open fund (We were closed from 1998 until about 2005 but re-opened then. I guess you don't need to market much when you're closed). I don't want to keep the fund's name a secret. I just think that I've divulged enough about myself personally here that if I were to tell you who I worked for it would be very easy to find out who I am, and I kind of like Internet anonymity. Feel free to ask questions--I'll give you the best answers I've got whether they may be right or wrong.

I kind of fell into the job to be honest. I came out of college and started working for a bank at the retail level. After about 9 months and much boredom I was ready to move up and I thought the bank was going to give me the opportunity. When they renegged I started thinking about other options. At the same time someone from my current company called me up because a guy in the trust department of the bank I was working at had dropped my name to her. I guess someone higher up was looking out for me. I started the job soon after at the bottom rung in the operations department as what is known as an "Operations Specialist." Basically I dealt with trade settlement, reconciliation and mundane back office things like that. Since it was a small company and the boss likes to give opportunity where deserved, he basically allowed me to grow through various roles into what I do now. I still do a bit of the operational stuff, but primarily as a backup. My main job is assistant portfolio manager where I do portfolio management and a lot of research. In addition to that, I do a lot of our hedge fund accounting work, am the secretary of the board of directors and try to help out wherever else I can. I basically read and watch the market all day long.

I also did an internship with Merrill Lynch when I was a junior in college. It was really a pathetic job. I had the option of going in during the day and doing grunt work and basically observing, or I could go in at night and help these douchebags make cold calls to try to find potential clients. It sucked ass.

There you have it. Long story not so short.

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Originally posted by Shakka We do an admittedly poor job of marketing ourselves--it's probably our biggest weakness. It's not by referral--we're an open fund (We were closed from 1998 until about 2005 but re-opened then. I guess you don't need to market much when you're closed). I don't want to keep the fund's name a secret. I just think that I've divulged enough about myself personally here that if I were to tell you who I worked for it would be very easy to find out who I am, and I kind of like Internet anonymity. Feel free to ask questions--I'll give you the best answers I've got whether they may be right or wrong. I kind of fell into the job to be honest. I came out of college and started working for a bank at the retail level. After about 9 months and much boredom I was ready to move up and I thought the bank was going to give me the opportunity. When they renegged I started thinking about other options. At the same time someone from my current company called me up because a guy in the trust department of the bank I was working at had dropped my name to her. I guess someone higher up was looking out for me. I started the job soon after at the bottom rung in the operations department as what is known as an "Operations Specialist." Basically I dealt with trade settlement, reconciliation and mundane back office things like that. Since it was a small company and the boss likes to give opportunity where deserved, he basically allowed me to grow through various roles into what I do now. I still do a bit of the operational stuff, but primarily as a backup. My main job is assistant portfolio manager where I do portfolio management and a lot of research. In addition to that, I do a lot of our hedge fund accounting work, am the secretary of the board of directors and try to help out wherever else I can. I basically read and watch the market all day long. I also did an internship with Merrill Lynch when I was a junior in college. It was really a pathetic job. I had the option of going in during the day and doing grunt work and basically observing, or I could go in at night and help these douchebags make cold calls to try to find potential clients. It sucked ass. There you have it. Long story not so short.

Doesn't hurt to be lucky..

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Originally posted by Krypton Doesn't hurt to be lucky..

No doubt. And there are days (and there are many of them) where it sucks total ass! Better lucky than good.