|
Posted by PeterL on May 27, 2009, 7:39 pm
> It has been said, and backed up by research, that it is impossible to
> find a manager who would 1) outperform the benchmarks in the long run,
> possibly not "consistently", 2) Will not take on unwarranted risk and
> recognize market follies enough to not participate in them.
>
> I would like to suspend this belief in such an impossibility. Let's
> assume, even if this is not true, that there are such managers and
> then can be identified.
>
> Under this lofty assumption, how would one go about finding such a
> manager? What sorts of people would you look for, where, how would you
> eliminate those that look like they could do (1) but lose everything
> due to failing on (2)?
>
> Essentially, the dilemma of a little investor, like myself, is that a
> good manager may be better than me at managing money, but there is
> almost inevitably an agency problem (conflict of interest) of one sort
> or another. This complicates search for a "great manager". Plus, some
> would not take small amounts of money.
>
> I would like to ask, if possible, to not argue whether a manager like
> this can be found. I wanted this thread to discuss how to find one,
> not whether it is possible.
>
> My own feeling about the question posed, is that it is very difficult
> to find a good manager that would satisfy both conditions and would
> work under an acceptable reward structure (and would take a relatively
> small amount to manage).
>
> It may be easier to identify certain red flags to be avoided, such as
> 1) investments in anything exotic taking up a large part of a
> portfolio, 2) excessive self promotion, 3) too much secrecy, 4) abuse
> of leverage.
>
> i
Sure it is possible and indeed those managers do exist. You need to
understand how the manager invests. For example, is this person a
value driver manager? How does he/she decide what stocks or MF's to
invest in. I presonally would not just give my money to someone to
invest. I would allow someone to buy and sell from my acct., so I
have control at all times. And of course you need to look at the
track record of the manager.
Generally fee only managers would take about 1% of your portfolio.
Anything too high or too low would be a red flag.
| 
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap