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Author: lethean Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 79749  
Subject: Re: Questions for a story Date: 3/22/2004 11:25 AM
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Here's another story.

We have a Keogh at a local/regional bank. Trust officer HAD discretion. "They" knew best and strongly recommended against the self-directed option. I'd say they intimidated me with dire stories of what happened to other clients when they decided to self-direct.

Long story short...I finally signed paperwork to self-direct, and eventually started making some changes. I had a few false starts '94/got scared, but started reading heavily again re BRK/WEB. During the market break in '00, I started putting cash to work. Still made/make mistakes, but overall quite pleased with the results since 2000.

Meantime, 1998 or so, that small bank started their OWN proprietary fund run by that SAME trust officer who had intimidated me and warned against the self-directed option... 5% load!, heavy expenses, good results for a couple of years, and then the bottom fell out. The fund posted -80% losses in EACH of 2 consecutive years!!! 2000/2001 and then folded into a Federated fund in 2002. He didn't lose his job at the bank, still runs individual accounts, and sits on internal investment committees at the bank. Everything swept under the rug.

I must admit that I tracked that proprietary fund against my own port during that time and took GREAT pleasure in the constrast. And, I'm no longer intimidated when I walk into that trust department. (You might call me assertive? :-) ).

I've omitted lots of horrendous detail. But, ask yourself...what made this bank think that the world needed one more proprietary mutual fund charging a 5% load, no less? GREED.

Buffett recently "relieved" them of an onerous loan portfolio, too. Hee hee. I love it.

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