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Author: imdajunkman Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35387  
Subject: Re: Inflation/Crash Insurance Date: 7/18/2006 3:06 PM
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Ryan,

If you want simple, but very sensible, then jump on Loki's offer to help you. But do NOT attempt to do it through Ed-J. The fees they charge on transactions will kill returns. You'll need a shop like Vanguard.

The August issue of Kiplinger's and their article on "7 investors who are beating the market" might be interesting to you, because several were doing it with mutual funds and using methods such as Loki advocates. Some of the investors were quite young and their portfolios were astronomical, in the millions of dollars, and, typically, that was growth achieved starting from a modest asset bases and over not unusually long time frames.

Loki is totally right. What I like, and what I do, is only for me. I'm willing to talk freely about it, because there are parts of what I'm doing that are common to all investing styles and all investing approaches --namely, the need for risk management. But I would never encourage anyone to do what I do. (I don't need the competition.)

The reason I mentioned that a true money manager might be of use to you (if you could meet their minimums) is that there are some very superior people out there if you can find them. Years and years ago, when I was first getting stated in investing, I used to attend the monthly seminars hosted by my brokerage firm. It was a series of lectures targeting beginning investors and covered the basic topics: What is a bond? What is an option? To present the talks, the firm would bring in an outside money manager. It was always very carefully explain who he was and that he wasn't fishing for clients. But, in fact, he was fishing for clients. However, the guy was excellent. He knew markets. He knew investing. He traded for his own account, and he was good.

I listened to his lectures for a couple of years. He knew his subject; he loved his subject. But what most impressive was his ability to listen to a question, to size up the person who was asking it and then to reply in a way that would both make sense to the questioner, but also to the whole audience. At the time, my assets were tiny. I couldn't meet what I knew were customary minimums for managed money. Eventually, I moved away firm trading through the firm (mainly mutual funds and an occasional stock) and on to other brokers where I could do bonds. But as my account grew, I knew I didn't want to manage all of it and I thought of him and set up an appointment and talked with him about what he might be able to do for me. He was reasonable, and he was flexible. The move would have been a good one. I should have gotten my foot in the door. For whatever reasons, I backed away and didn't follow up. Then, years later, I again contacted him, because now I clearly met minimums and had cash that needed putting to work. But he was no longer accepting new money. That's been one of my regrets. Good money managers – and by “good” I mean someone who is trading for his own account and making a living from it, not just from fees on assets under management— are hard to find. I had found one and let the opportunity slip away.

Charlie
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