PRACTICAL STOCK INVESTING

I arrived on Wall Street (actually mid-town Manhattan) in the late Seventies, more or less by accident.  After college and almost four years in the Army, I had returned to graduate school intending to teach humanities.  Luckily–although it didn’t seem so at the time–the Baby Boom had already passed through college by the time I got my degree, faculties were contracting, and I couldn’t find a job I was willing to take.  So, on the advice of a friend, I tried the stock market instead.

Wall Street was just beginning to recover at that time from the dual shocks of the ’73-’74 recession and the deregulation of commission charges (“Mayday” 1973).  So I found a job relatively quickly.  I spent my first four years as a securities analyst, while getting an MBA in finance at night and taking the CFA exams.  I then spent close to two years working as an assistant on a short portfolio before becoming a full-time portfolio manager.

I spent about 18 months managing money in Pacific Basin markets in the mid-Eighties, before settling on global portfolios (US + non-US), as the area that really interested me.  I’ve been the head of global stock investing at a couple of places, where I’ve also trained and supervised analysts and portfolio managers.  

My portfolios have gotten awards for superior performance from a number of organizations over the years.  While that’s probably better than never having gotten any, everyone is bound to have a good year now and then.  I consider it a much more important achievement that I stayed employed for close to thirty years in a brutally competitive industry with high minimum standards of achievement.

Like most American-trained investors, my strength is in individual stock analysis and selection.  This is an area where the US has a huge technological advantage over the rest of the world.  Applying this skill abroad isn’t always as straightforward as it might seem, however.  Sometimes in the land of the blind, the one-eyed man isn’t king–he’s just someone without an acute sense of hearing.

I had long ago decided that I didn’t want to hold a conventional job past sixty.  So a couple of years ago, I began thinking about what I might do.  For a short while, I considered opening a hedge fund.  I decided not to after I realized that my prime broker made much more money from–and therefore was much more interested in–a fixed income manager who would leverage his equity 3x-4x as a matter of course, thereby generating a big margin interest bill.

While I was managing stock portfolios for others, I felt I should have my own money in the same place as my clients’.  Once I stopped, and having only defined contribution retirement assets, I was faced with the issue of how to arrange my own 401ks and IRAs.  As I started to reshape my own asset structure, I began to realize what a daunting task this must be for someone who has not made a career as a money manager.  Hence, this blog.

Note:  Please read my disclaimer.  Thanks.