wallstreeter,

You did not explain your strategy in a Bear Market very well

Especially since you said you don't get paid unless you have a 20% profit.

Technical indicators work very well, and 90% of the time it can be a self-fullfilling prophecy.

However, when a companies P/E decides to shrink from 30 to 20, there is not a chart strategy thats going to save you from the inevitable.

I'll ask again - DO YOU SHORT.

[quote=FreeLunch]

wallstreeter,

You did not explain your strategy in a Bear Market very well

Especially since you said you don't get paid unless you have a 20% profit.

Technical indicators work very well, and 90% of the time it can be a self-fullfilling prophecy.

However, when a companies P/E decides to shrink from 30 to 20, there is not a chart strategy thats going to save you from the inevitable.

I'll ask again - DO YOU SHORT.

[/quote]

The first thing I learned in this business was that P/E ratios mean sh*t.  Literally, that's what I heard, I don't even look at them.

And, yes, I already answered, we do short.  Just not short anything right now.  And in a true bear market we don't short THAT MUCH.  We have to be prepared to weather the storm.  Trust me, there have been at least a couple bad years, but the good ones more than make up for it.

Kind of exciting to hear from a real stock jock. Most of us here are in the financial education business, of sorts. My biz to is try to diversify risk to the point of boredom, where blended index returns at reasonable cost rule the day.

Of course, when someone comes to me with $350,000 to invest and nearer term portfolio withdrawal goals, I'm thinking preservation.

In fact, in order to generate some excitement around here, I'm thinking to hire someone to go gather more assets that we can be boring about.

With the money money I manage and your returns, I could become a massive target for the IRS and double my lifestyle. I guess there are different kinds of intelligence, my may have more to do with making folks feel good or using a loft wedge to feel my way to the green from fifty yards.

What you are doing is cool and inspiring.

[quote=wallstreeter][quote=AllREIT] [quote=GolFA]

This is pretty hard to believe. No way you are pulling 5% off principle, in up and down markets, unless you have a steady stream of suckers. If this is a 40 year phenomenon, it would have been mentioned in my CFP study materials. Sorry.

[/quote]

It's called churning, and it was mentioned.
[/quote]

Let me put it this way: Our policy with our clients is that if we trade a position and they did not gross 20% profit, we take our commission out.  We don't make money unless they make money.  This is what makes us unique.  Everyone out there is getting their CFP, but we are literally offering something they can't get from the majority of financial professionals out there. 

[/quote]

Dude, that's illegal.

[quote=GolFA]

Kind of exciting to hear from a real stock jock. Most of us here are in the financial education business, of sorts. My biz to is try to diversify risk to the point of boredom, where blended index returns at reasonable cost rule the day.

Of course, when someone comes to me with $350,000 to invest and nearer term portfolio withdrawal goals, I'm thinking preservation.

In fact, in order to generate some excitement around here, I'm thinking to hire someone to go gather more assets that we can be boring about.

With the money money I manage and your returns, I could become a massive target for the IRS and double my lifestyle. I guess there are different kinds of intelligence, my may have more to do with making folks feel good or using a loft wedge to feel my way to the green from fifty yards.

What you are doing is cool and inspiring.

[/quote]

Oddly enough we are shifting the business to capture more assets.  Where before our book was 99% stocks, we are trying to gather outside assets in more of a wealth preservation way so that stocks make up 70% of the business.  With the 30% in funds, UITs, etc, with our 83%, the annuitized business would be quick and easy. 

We just have to find the right clients - we don't do insurance at all, if I knew Bobby, i'd probably refer it to him.

The best part about it is that it's a lost art and the right kind of people appreciate it for what it is.  Others who don't understand it, don't believe it, or what have you will just badmouth it.   

[quote=wallstreeter][quote=GolFA]

Kind of exciting to hear from a real stock jock. Most of us here are in the financial education business, of sorts. My biz to is try to diversify risk to the point of boredom, where blended index returns at reasonable cost rule the day.

Of course, when someone comes to me with $350,000 to invest and nearer term portfolio withdrawal goals, I'm thinking preservation.

In fact, in order to generate some excitement around here, I'm thinking to hire someone to go gather more assets that we can be boring about.

With the money money I manage and your returns, I could become a massive target for the IRS and double my lifestyle. I guess there are different kinds of intelligence, my may have more to do with making folks feel good or using a loft wedge to feel my way to the green from fifty yards.

What you are doing is cool and inspiring.

[/quote]

Oddly enough we are shifting the business to capture more assets.  Where before our book was 99% stocks, we are trying to gather outside assets in more of a wealth preservation way so that stocks make up 70% of the business.  With the 30% in funds, UITs, etc, with our 83%, the annuitized business would be quick and easy. 

We just have to find the right clients - we don't do insurance at all, if I knew Bobby, i'd probably refer it to him.

The best part about it is that it's a lost art and the right kind of people appreciate it for what it is.  Others who don't understand it, don't believe it, or what have you will just badmouth it.   

[/quote]

Soooooo.......you're gonna take something that's averaged 30%/year and do LESS of it?

[quote=Bobby Hull][quote=wallstreeter][quote=GolFA]

Kind of exciting to hear from a real stock jock. Most of us here are in the financial education business, of sorts. My biz to is try to diversify risk to the point of boredom, where blended index returns at reasonable cost rule the day.

Of course, when someone comes to me with $350,000 to invest and nearer term portfolio withdrawal goals, I'm thinking preservation.

In fact, in order to generate some excitement around here, I'm thinking to hire someone to go gather more assets that we can be boring about.

With the money money I manage and your returns, I could become a massive target for the IRS and double my lifestyle. I guess there are different kinds of intelligence, my may have more to do with making folks feel good or using a loft wedge to feel my way to the green from fifty yards.

What you are doing is cool and inspiring.

[/quote]

Oddly enough we are shifting the business to capture more assets.  Where before our book was 99% stocks, we are trying to gather outside assets in more of a wealth preservation way so that stocks make up 70% of the business.  With the 30% in funds, UITs, etc, with our 83%, the annuitized business would be quick and easy. 

We just have to find the right clients - we don't do insurance at all, if I knew Bobby, i'd probably refer it to him.

The best part about it is that it's a lost art and the right kind of people appreciate it for what it is.  Others who don't understand it, don't believe it, or what have you will just badmouth it.   

[/quote]

Soooooo.......you're gonna take something that's averaged 30%/year and do LESS of it?

[/quote]

Yes, because some of our clients have assets at other firms and now we are bringing that in.  We would like to have some annuitized business, there are many reasons to do it that you can't possibly understand.

wallstreeter, why don't you guys start a hedge fund? seems like you have the right clients. and if you guys really deliver those returns, you would make more $$$$

Well, that's a good point. There is always a "marketing mix" in servicing clients - sweet spots that balance everything for you and the client.

For example, how stressful is your business, without a fee based core that might be a little more boring and diversified.

As far as the lost art, yes, I think you are right. Old school was to just keep a portfolio of securities - and the " planners " who used funds were not real advisors.

Plus, your brain just gets soft or maybe your " luck " runs cold after a while, or maybe you want to move onto other things a little - in my case, I have started cold calling other advisors and just asking who wants to move over here. If I make the one or two "sales" - the right sale, my AUM, my AUM, and income, will double in three or more years.

That's why guys shouldn't get in a pissin contest about who does it best - so many great ways to dice a succulent pineapple.

I tried to bring in more stock sizzle to my portfolios a couple of years ago - your'e right, one in 5 was a rocket ship, just using the S&P platinum or whatever list it was we bought - but I sleep better now being Mister Milqutoast and focusing on golf related advising. ( Clients who like golf get more personal attention.) 

[quote=wallstreeter]

The first thing I learned in this business was that P/E ratios mean sh*t.  Literally, that's what I heard, I don't even look at them.

And, yes, I already answered, we do short.  Just not short anything right now.  And in a true bear market we don't short THAT MUCH.  We have to be prepared to weather the storm.  Trust me, there have been at least a couple bad years, but the good ones more than make up for it.

[/quote]

If you don't look at P/Es - then you are not a stock trader, you are a CHART TRADER.  If you don't look at P/Es, you are disregarding the most important variable in the equation.

IN CASE YOU HAVEN'T THOUGHT ABOUT THIS, 99% OF A STOCKS DAILY/WEEKLY/MONTHLY MOVE IS A CHANGE IN P/E

The P/E, more importantly Forward P/E is the most important variable along with EPS in the equation.

IF YOU DON'T LOOK AT P/E AND FORWARD P/E YOU ARE MAKING A HUGE MISTAKE.    Your skills inevitably come down to reading charts, and do not involve insight.

Take Apple for example.

They reported April 25th - stock ended up around $100 per share.

the stocks at $130.

Hmmm....Earnings haven't changed.  What has?

Price = EPS X (?)

The Forward P/E has gone up proportionately.

You trade the chart, all the time.  And I'm here to tell you point blank that what moves the stock, for the most part is a mix between supply and demand and their future profit potential.

Why do you think that earning forecasts play such a huge role

GROWTH GROWTH GROWTH

very interesting thread. 

Wallstreeter, I have to agree with some of the other posters.  If you're rockin' it that hard, start a hedge fund.  If you have that long of a track record, it should be an easier sale than some, and you've already got a substantial client base for seed money.

I guess at that point, wouldn't one of the big questions be whether to hire on some other hotshot specialists to diversify the holdings and strategies into, say, art and real estate and currency bets, etc..., or just stick with what's been working? 

I just did a google for "highest paid hedge fund manager", and clicked on the first article.  I read the whole thing, and thought it got a little preachy.  Then I realized that it's hosted on a website called "World Socialist Website".  No wonder.

http://www.wsws.org/articles/2005/jun2005/hedg-j09.shtml

Here's a link from April of the top 10 highest paid hedge fund managers.  Can you imagine pulling down $2B in 1 year?  Do these guys literally eat, sleep, and shave in front of a terminal?  Do they have time to spend the mountain of money they make each hour?  Anyone know if there's a "typical day in the life of" a (really successful) hedge fund manager? 

http://paul.kedrosky.com/archives/2007/04/11/top_ten_highest .html

Remember Gordon Gekko?

I'm talking liquid. Enough money to have your own jet. Enough money not to waste time. Fifty, one hundred million dollars. A player.

[quote=Big Taco]

very interesting thread. 

Wallstreeter, I have to agree with some of the other posters.  If you're rockin' it that hard, start a hedge fund.  If you have that long of a track record, it should be an easier sale than some, and you've already got a substantial client base for seed money.

I guess at that point, wouldn't one of the big questions be whether to hire on some other hotshot specialists to diversify the holdings and strategies into, say, art and real estate and currency bets, etc..., or just stick with what's been working? 

I just did a google for "highest paid hedge fund manager", and clicked on the first article.  I read the whole thing, and thought it got a little preachy.  Then I realized that it's hosted on a website called "World Socialist Website".  No wonder.

http://www.wsws.org/articles/2005/jun2005/hedg-j09.shtml

Here's a link from April of the top 10 highest paid hedge fund managers.  Can you imagine pulling down $2B in 1 year?  Do these guys literally eat, sleep, and shave in front of a terminal?  Do they have time to spend the mountain of money they make each hour?  Anyone know if there's a "typical day in the life of" a (really successful) hedge fund manager? 

http://paul.kedrosky.com/archives/2007/04/11/top_ten_highest .html

[/quote]

I'll be the first to admit we don't have the assets, clientele, nor connections to justify a hedge fund.  We are just boutique stockbrokers that do well for our clients.  Our book isn't huge, there hasn't been any prospecting in 7 years, but that has now changed and we are actively looking for new clients.  We have thought about possibly starting an online stock picker subscription service based on our strategies, but the legality of it probably would require one of us to not be licensed and not be a broker.  If we could get 10,000 customers of that at $500/year, that would be $5,000,000/year with very little overhead.  When the regulator's cut the commissions, 12b-1 fees, and whatever else they want to do, that's when we would just find a way to do that.

I am jumping into this discussion late, but…



Wallstreeter said: “Not all the stocks are winners, but 85% of them are.” when

describing his portfolio management. This is where he loses all credibility

with me. No one, and I mean no one, picks stock that are winners 85% of

the time. If they did, they sure as hell wouldn’t be wasting time posting on

an internet message board. They would be on a beach…retired.



The most successful money managers in the world only get it right 55-60%

of the time.



The fact that Wallstreeter claims 85% accuracy, with 5% ROA…this guy is

full of crap.

I just read this entire thread…let me tell you guys something -

Wallstreeter is feeding you guys a bunch of crap.



No one picks winners 80% of the time.

No one averages 30-40% per year for 40 years and DOESN’T HAVE

ENOUGH ASSETS TO START A HEDGE FUND?!?!?!?



And then he goes on to say "let me put it this way: Our policy with our

clients is that if we trade a position and they did not gross 20% profit, we

take our commission out. We don’t make money unless they make

money. This is what makes us unique."



The reason this is so unique…is because it is illegal!! No compliance

would go for this. No idiot would post it on a forum if he was doing it.



I am all for stock pickers. I think it is a lost art and I am one. I do all

discretionary portfolio management. I have a very good track record, but

do not come close to picking 85% winners. There is no way you can have

85% success rate an only hold stocks for a few months at a time.



This guy makes me laugh - and to think that some of you are buying

it…sheeeesh. Come on guys.

Maverick is right.  I was lying about everything.  Just thought it would be an interesting thread on a boring day.  Back to selling insurance.

Wallstreeter

I believe you. I see people who use Zacks research and have that type of ROA and beat the market. I use syndicate deals to generate a high ROA on a certain amount of client assets. I first set the accounts up in mutual funds, UIT's or some type of managed account. Secondly, I will take a portion of the account and trade syndicate deals. I was the syndicate cordinater at MS for about 15 years and am familiar with how deals work. I also would get cold called by "hedge funds" (IPO and Secondary DVP whores) who try to buy any deal and sell it in a few days or at least short term. I do the same strategy. You need to have the nerve to buy 20k or 30k in a stock and trade it for 10%. I have done this for years and still do it at my new firm. I will also be someones best client when I retire from this business because I will do the same and it works. Everyone wants the hot deals and that was great in 1999 and 2000 but now a hot deal is 100-200 shares that goes up 5 points. We just did ESEA one week ago at 13.50 (a secondary) and sold it last week 14.50-14.75 with a 10 cent markdown. If they do not work in a few months and we are down, i will sell them without a commision. Other notes are selling an IPO on the day the underwriters put the stock on the buys list. this occurs about one month after the deal.

Remember that there are many different ways to make money

This guy makes me laugh - and to think that some of you are buying
it...sheeeesh. Come on guys.

My approach is to always try and draw people out, and learn what I can. He dramatizes some good points - like when he said they pull 5% off of 10 million, maybe that is the part of the portfolio they invest aggressively, maybe they have cash, bond ladders, buy and hold stocks somewhere else they aren't so exciting.

The threads here are often pissing contests, and then you have the guys who love to give " tough love " and call out the bullsh*t.

We've all been around long enough to know that some of the dramatic stuff here does not hold water in a sustained and steady fashion. But elements are true, and it's fun to dream.

[quote=Big Taco]

Remember Gordon Gekko?

I'm talking liquid. Enough money to have your own jet. Enough money not to waste time. Fifty, one hundred million dollars. A player.

[/quote]

Gekko is coming back. Sequel being filmed or has already been filmed. Name of movie, "Money Never Sleeps".