Investment A

Beta= 1.1

Alpha= 2.5

R Sq= 65



Investment B

Beta=1.0

Alpha= 1.8

R Sq= 91



Which one is better Put?

[quote=stanwbrown]

Once again the "traveling manager" proves he knows nothing about the business. Competing for the managed money business of trusts and foundations is anything but “directed business”. The vast majority of them have boards that understand their fiduciary responsibilities and take them seriously They know what sharp financial advisors look like and know how to kick out a RFP.  It’s highly competitive and there’s no “Bagadonuts” types earning it.

[quote=rightway]Investment A

Beta= 1.1

Alpha= 2.5

R Sq= 65



Investment B

Beta=1.0

Alpha= 1.8

R Sq= 91



Which one is better Put?

[/quote]

That would depend on what your objectives were.



Analysis such as this has been debunked as being nothing more than post
mortum ways of explaining what happened.  Everything about the
future is nothing more than estimates and as anybody who has been in
the biz for more than half an hour knows, past performance is not a
reliable indicator of future results.



One of the most frustrating thing to market theory types is that they
will sit and scream, “But the statistical analysis is saying buy!” and
investors are saying, “I don’t give a flying phuck, I am staying in
cash.”

Fair enough.  Then tell me which of these investments served its
shareholders better in the past, assuming the underlying index they
were being compared to was the same.  The answer is painfully
obvious, but still- support your answer with your rationale.

[quote=rightway]Fair enough.  Then tell me which of these investments served its
shareholders better in the past, assuming the underlying index they
were being compared to was the same.  The answer is painfully
obvious, but still- support your answer with your rationale.
[/quote]



Beats the hell out of me.  If I was also a hedge fund analyst I
would be the King of All that I survey instead of the King of most of
what I survey.



The answer to your little puzzle means exactly zero to me and my life.  If it does to you I think that’s nice.



I will say this.  Brokers who spend a lot of time working with
stuff like sophisticated modeling are wasting their time–you should be
looking for a new client instead of wondering how to add alpha to a
portfolio that cannot possibly absorb the risks associated with such
techniques.



If you’ve got your clients in funds that are underperfoming goose them
up by changing to funds that are managed by managers who understand
adding alpha rather than trying to do it yourself.

Hmmmm.  Your last sentence is interesting.  How then are we
to “find” these better fund managers that understand alpha?  

[quote=rightway]Hmmmm.  Your last sentence is interesting.  How then are we
to “find” these better fund managers that understand alpha?  
[/quote]



You have me confused with somebody who gives a damn.  I am not
interested in goosing up my 23% annualized return.  I’m telling
you that plain old fashioned transaction brokers can out perform most
of the fund managers.

[quote=Put Trader] [quote=stanwbrown]

Once again the "traveling manager" proves he knows nothing about the business. Competing for the managed money business of trusts and foundations is anything but “directed business”. The vast majority of them have boards that understand their fiduciary responsibilities and take them seriously They know what sharp financial advisors look like and know how to kick out a RFP.  It’s highly competitive and there’s no “Bagadonuts” types earning it.

[/quote]
I fully understand the competition for such accounts.  My point is that it is impossible to win the competition unless you are favored.

That you do not grasp the intellctual disconnect involved in saying that it's highly competitive but "no Bagadonuts types earn it."  If it's competitive the Bagadonuts types would have a chance.

I agree that they don't because the competition is limited to those who are favored.
[/quote]

Again you prove you have no idea what you're talking about. Boards these days understand their fiduciary responsibilities and they know having "favored" brokers who don't have to compete is a non-starter.

By "Bagadonuts" I assumed we were talking about people like you, clueless, wearing the short sleeve shirt and the too short tie. There's no bluffing your way into this business any more.

[quote=rightway]Fair enough.  Then tell me which of these investments served its shareholders better in the past, assuming the underlying index they were being compared to was the same.  The answer is painfully obvious, but still- support your answer with your rationale. [/quote]

He is not now, nor has he ever been a respectable producer. He's simply incapable....

[quote=stanwbrown][quote=Put Trader] [quote=stanwbrown]

Once again the "traveling manager" proves he knows nothing about the business. Competing for the managed money business of trusts and foundations is anything but “directed business”. The vast majority of them have boards that understand their fiduciary responsibilities and take them seriously They know what sharp financial advisors look like and know how to kick out a RFP.  It’s highly competitive and there’s no “Bagadonuts” types earning it.

[/quote]
I fully understand the competition for such accounts.  My point is that it is impossible to win the competition unless you are favored.

That you do not grasp the intellctual disconnect involved in saying that it's highly competitive but "no Bagadonuts types earn it."  If it's competitive the Bagadonuts types would have a chance.

I agree that they don't because the competition is limited to those who are favored.
[/quote]

Again you prove you have no idea what you're talking about. Boards these days understand their fiduciary responsibilities and they know having "favored" brokers who don't have to compete is a non-starter.

By "Bagadonuts" I assumed we were talking about people like you, clueless, wearing the short sleeve shirt and the too short tie. There's no bluffing your way into this business any more.

Put-



I am the living embodiement of how wrong you are in regards to who the
boards and foundations hire and why.  Getting in there is tough,
requiring sales skills, which you clearly do not respect (yet you
"advise" us young kids to spend time getting new clients instead of
"adding alpha"), and technical skills as to the management of the
assets (hence the CFP, CIMA, and CFA Ed.). 



You do not understand the very basics of analysis (based on Nobel Prize
Winning work- but you are right and they are wrong?) that both brokers
and money managers use in evaluating risk and return for both
individual securities and managed vehicles.  We could have a
valuable debate about this theory but you don’t understand it, so we
canot debate it.  The fact you managed reps is scary in that you
do not even understand these very basic practices.



Instead, you show you ignorance by swearing out here when posed with a
valid question and claiming real knowledge of such things is a waste of
time (because you have no such knowledge).  Anyone out here who
reads your last few posts will see you for who you are, someone who
either is not in this business or someone who embraces his obvious
insecurities by dispensing broad strokes of advice and criticisms about
subject matter so simple anyone with a mutual fund account and a broker
that recently fired them could accomplish. 

[quote=rightway]Put-



I am the living embodiement of how wrong you are in regards to who the
boards and foundations hire and why.  Getting in there is tough,
requiring sales skills, which you clearly do not respect (yet you
"advise" us young kids to spend time getting new clients instead of
"adding alpha"), and technical skills as to the management of the
assets (hence the CFP, CIMA, and CFA Ed.). 



You do not understand the very basics of analysis (based on Nobel Prize
Winning work- but you are right and they are wrong?) that both brokers
and money managers use in evaluating risk and return for both
individual securities and managed vehicles.  We could have a
valuable debate about this theory but you don’t understand it, so we
canot debate it.  The fact you managed reps is scary in that you
do not even understand these very basic practices.



Instead, you show you ignorance by swearing out here when posed with a
valid question and claiming real knowledge of such things is a waste of
time (because you have no such knowledge).  Anyone out here who
reads your last few posts will see you for who you are, someone who
either is not in this business or someone who embraces his obvious
insecurities by dispensing broad strokes of advice and criticisms about
subject matter so simple anyone with a mutual fund account and a broker
that recently fired them could accomplish. 

[/quote]



I read that three times trying to get the sensation that it actually
said something rather than concluding that it was just a runon sentence
that went nowhere.



Sadly it was the latter.  Just damn, I hate it when I waste my time like that.



Listen up.  The role of a stock broker is to sell.  It is not
to add alpha, it is not to sit with a Hewlett Packard calculator and
calculate mean deviations and R Sq crap, it’s to sell.  You pick
up the phone and call people asking if they are willing to listen to
another voice.



If they say yes or maybe you have an opening, if they say no you do
not, at least not then.  If they tell you to phuck off, or some
other term of endearment, you hang up and go get a drink of water
before you come back and tell yourself, "There has to be a pony in here
somewhere."



People who spend their time trying to decide if a portfolio has enough
alpha are portfolio manager wannabes and this is not the route to that
job.



Your career path has three branches.  You can go into
administration, you can go out the door, or you can stay at your desk
for the rest of your working life.



You are not going to become an analyst, you are not going to become a
portfolio manager and you are not going to become an operations manager.



You might–doubtful, but possible–end up on the “Buy Side.”  That
means that you might end up being the client.  There are brokers
who make that transition–it seems like a logical thing to do to hire
your portfolio manager from the sell side, but in reality it rarely
happens.



Coming into the business one ends up on the “Sell Side” or on the “Buy Side” often by little more than fate.



This is the sell side–and it has but one role, to sell.  If you
like to play around with mean deviations and regressions from the
hickey and how that relates to how far you are from home multiplied by
your age squared you are in the wrong place.



For what it’s worth–this sixty year old man has come to truly
appreciate the Bill Cosby line about anal types who fancy themselves as
being smart.  He said, "Ever been in one of those conversations
like, "Why is there air?’  Hell I know why there’s air–to blow up
volley balls."



I have a Mensa certificate because I always tested well and wondered if
I could get one–sure enough I did.  I then went to one of their
meetings and quietly left after a few minutes–I just don’t give a damn
about what they were talking about.



Just like I don’t give a damn about adding alpha–oh sure I think the
need is there at times, but I’ve been in meetings where it was being
explained that such sophisticated techniques carry so much risk that
all but the largest of portfolios should steer clear.



A guy sitting out here with a quarter of a million in his qualfied plan
is not going to be able to effectively use derivatives to hedge himself
or to increase his return.



Again, if you’re a stock broker in the East Jesus branch your job is to
be on the phone.  If you own a Hewlett Packard calculator throw it
away–you need a dial pad and the abilty to convince a client that you
can be their eyes and ears.  If there is a brain in the equation
it’s the portfolio manager, and that ain’t you!

[quote=Put Trader] [quote=stanwbrown][quote=Put Trader] [quote=stanwbrown]

Once again the "traveling manager" proves he knows nothing about the business. Competing for the managed money business of trusts and foundations is anything but “directed business”. The vast majority of them have boards that understand their fiduciary responsibilities and take them seriously They know what sharp financial advisors look like and know how to kick out a RFP.  It’s highly competitive and there’s no “Bagadonuts” types earning it.

[/quote]
I fully understand the competition for such accounts.  My point is that it is impossible to win the competition unless you are favored.

That you do not grasp the intellctual disconnect involved in saying that it's highly competitive but "no Bagadonuts types earn it."  If it's competitive the Bagadonuts types would have a chance.

I agree that they don't because the competition is limited to those who are favored.
[/quote]

Again you prove you have no idea what you're talking about. Boards these days understand their fiduciary responsibilities and they know having "favored" brokers who don't have to compete is a non-starter.

By "Bagadonuts" I assumed we were talking about people like you, clueless, wearing the short sleeve shirt and the too short tie. There's no bluffing your way into this business any more.

[/quote]

Stan, do you suppose that there might be more than one broker who moves in the world of foundations and charities?

The chances that J Witherington Witherspoon, IV is going to choose anybody other than one of "our own" as the broker for such monies is the height of self delusion.
[/quote]

Just when it seems you couldn't possibly prove yourself to be more clueless, you lower the bar. Once again you go to your old bag of stereotypes, and this time pull out a preppy board member who hasn't a clue about his fiduciary responsibilities so he can hire Biff as the board's broker.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

No one will ever confuse me for Biff, but I've been in plenty of these competitions and have won more than my far share. It isn’t about being Biff, it’s about knowing investment policies, investment theory, the laws and what's going to keep the board members out of hot water.

I would suggest that those here interested in working with HNW clients looking this kind of business. Pursue a CIMA designation, learn managed money, ERISA and investment structure and ignore the fossil’s assertion that you have to be one of “them” to get the business.

[quote=rightway]Put-

I am the living embodiement of how wrong you are in regards to who the boards and foundations hire and why.  Getting in there is tough, requiring sales skills, which you clearly do not respect (yet you "advise" us young kids to spend time getting new clients instead of "adding alpha"), and technical skills as to the management of the assets (hence the CFP, CIMA, and CFA Ed.). 

You do not understand the very basics of analysis (based on Nobel Prize Winning work- but you are right and they are wrong?) that both brokers and money managers use in evaluating risk and return for both individual securities and managed vehicles.  We could have a valuable debate about this theory but you don't understand it, so we canot debate it.  The fact you managed reps is scary in that you do not even understand these very basic practices.

Instead, you show you ignorance by swearing out here when posed with a valid question and claiming real knowledge of such things is a waste of time (because you have no such knowledge).  Anyone out here who reads your last few posts will see you for who you are, someone who either is not in this business or someone who embraces his obvious insecurities by dispensing broad strokes of advice and criticisms about subject matter so simple anyone with a mutual fund account and a broker that recently fired them could accomplish. 
[/quote]

Rightway, the guy's clueless. You and I differ on the value of a CFA to a retail rep (but education's never a negative, right?) but it should be clear to anyone with AUM beyond $5M that Put's a bitter, non-producing, racist, old gasbag...

[quote=stanwbrown]

<o:p></o:p>

No one will ever confuse me for Biff, but I've been in plenty of these competitions and have won more than my far share. It isn’t about being Biff, it’s about knowing investment policies, investment theory, the laws and what's going to keep the board members out of hot water.

I would suggest that those here interested in working with HNW clients looking this kind of business. Pursue a CIMA designation, learn managed money, ERISA and investment structure and ignore the fossil’s assertion that you have to be one of “them” to get the business.

[quote=Put Trader] [quote=stanwbrown]

No one will ever confuse me for Biff, but I've been in plenty of these competitions and have won more than my far share. It isn’t about being Biff, it’s about knowing investment policies, investment theory, the laws and what's going to keep the board members out of hot water.

I would suggest that those here interested in working with HNW clients looking this kind of business. Pursue a CIMA designation, learn managed money, ERISA and investment structure and ignore the fossil’s assertion that you have to be one of “them” to get the business.

[/quote]

In theory Stan, in theory.

[/quote]

Given that you were never a producer, and never approached this business, "theory" is all you have to yammer about. OTOH, Rightway and I DO this business, and we know you're talking out of your hat, as usual. <?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

There is no better concentration of HNW investors anywhere than the boardrooms of charities and foundations. If you want to work with those people, get into the game, do the hard work of learning the rules better than they do and compete.

Now, knowing that you shied away from the competition of production, and sought the refuge of a substitute teacher, er, manager’s life, the very idea of competing for business probably scares the bejesus out of you, but the brokers on this board will understand and welcome the challenge.

[quote=stanwbrown][quote=Put Trader] [quote=stanwbrown]

No one will ever confuse me for Biff, but I've been in plenty of these competitions and have won more than my far share. It isn’t about being Biff, it’s about knowing investment policies, investment theory, the laws and what's going to keep the board members out of hot water.

I would suggest that those here interested in working with HNW clients looking this kind of business. Pursue a CIMA designation, learn managed money, ERISA and investment structure and ignore the fossil’s assertion that you have to be one of “them” to get the business.

[/quote]

In theory Stan, in theory.

[/quote]

Given that you were never a producer, and never approached this business, "theory" is all you have to yammer about. OTOH, Rightway and I DO this business, and we know you're talking out of your hat, as usual.

There is no better concentration of HNW investors anywhere than the boardrooms of charities and foundations. If you want to work with those people, get into the game, do the hard work of learning the rules better than they do and compete.

Now, knowing that you shied away from the competition of production, and sought the refuge of a substitute teacher, er, manager’s life, the very idea of competing for business probably scares the bejesus out of you, but the brokers on this board will understand and welcome the challenge.

Stan-



I agree with you on the CFA. Level 1 wasn’t too bad, level two
absolutely leveled me- I could not believe how hard it was, and level
3, which is suppose to be the easiest one, is like a making myself
throw up…I just can’t bring myself to it.  I would go with the
CFP no matter what (and that is also very difficult), then the CIMA if
you are going to do any institutional and/or large charitable
work.  A year ago I had one board member of a church ask a
question about some MPT issues and I answered it and he smiled and said
I was the only one of 3 teams that came in that knew what he was
talking about (even though I think he was a wind bag showing
off).  



I love how Put tells eveyone to focus on selling instead of “adding
alpha”, yet he cannot acknowledge the fact that reps need to have the
ability to choose good managers and funds, not “add alpha”.  A
simple task he could not complete with my example.  I just think
he missed the point because he is not in the business anymore.  He
sounds like a broker who made a bunch of clients broke in the 70’s with
his poor recomendations…and is now bitter.



I agree with most of your posts Stan.

"Listen up.  The role of a stock broker is to sell.  It is not
to add alpha, it is not to sit with a Hewlett Packard calculator and
calculate mean deviations and R Sq crap, it’s to sell.  You pick
up the phone and call people asking if they are willing to listen to
another voice."



I manage a great deal of money you ignorant piker.  Your diareha of the keyboard in constepation of your mind.



I don’t call strangers waiting for an opening.  I don’t add alpha,
I just know how to find managers and stratagies that add it…something
you cannot comprehend since you cannot even relate it to
anything…other than your swear words.  I don’t open $250K
accounts anymore, and I don’t look for people willing to “listen to
another voice”.   Folks like Stan, Joe, EZ, and even
Inquisetive (even though we disagree),  represent something new
folks should read.  You should be read too, but just because your
represent the very type of wannabe prospect we should all stay away
from.  Keep posting.

[quote=rightway]Stan-



I agree with you on the CFA. Level 1 wasn’t too bad, level two
absolutely leveled me- I could not believe how hard it was, and level
3, which is suppose to be the easiest one, is like a making myself
throw up…I just can’t bring myself to it.  I would go with the
CFP no matter what (and that is also very difficult), then the CIMA if
you are going to do any institutional and/or large charitable
work.  A year ago I had one board member of a church ask a
question about some MPT issues and I answered it and he smiled and said
I was the only one of 3 teams that came in that knew what he was
talking about (even though I think he was a wind bag showing
off).  



I love how Put tells eveyone to focus on selling instead of “adding
alpha”, yet he cannot acknowledge the fact that reps need to have the
ability to choose good managers and funds, not “add alpha”.  A
simple task he could not complete with my example.  I just think
he missed the point because he is not in the business anymore.  He
sounds like a broker who made a bunch of clients broke in the 70’s with
his poor recomendations…and is now bitter.



I agree with most of your posts Stan.

[/quote]



Note that we were told that a windbag asked a question that this soul
was able to answer–but that the story does not end with, "…and as a
result I opened a whale of an account."



The street is littered with types who know all the answers, but don’t
grasp that it’s not their job to know the answers.  Your job is to
gather assets–to open accounts.



Want to add alpha–get on the phone and ask somebody in New York what you should do, don’t try to do it yourself.



There are about 5,000 mutual funds–it’s ridiculous to think that a
broker in the Bumphuck Iowa branch is going to even know where to start
when it comes to finding a fund that suits a client’s needs. 
Solution–get on the phone to New York and ask for help.



This clown, Rightway, wastes so much time that it’s a wonder he has not
washed out already–but then it’s been a gravy train since 1982 so
nobody has.