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Subject:  Re: Ladder vs. Active Management Date:  5/21/2009  4:05 PM
Author:  jackcrow Number:  27581 of 36686


Mostly because we are small. What would be a very marginal upside for a larger fund is significant to our little pile. We also can pick and pluck ones and twos rather than rounder 10's and 25's and 100's. Finally, if we manage our friction costs we can often do better than paid for services.

One other advantage is that we are managing our money for our needs specifically. Any money manager or fund manager has multiple clients and thus they have to make broad decisions for all. They don't have time to shop for each and every client so the shopping is bundled. If we want to buy a new car in 3 years we can fund it, specifically. If we are more nervous or optimistic we can act accordingly. Some managers refuse to "dabble" in junk or are required to avoid junk, which means they must dump something they are holding if it dips below commercial grade, usually at a loss. We don't have to if we think the company can muddle through and keep paying the coupon and returning our face value to us in the end. We can also dip in the "junk" trunk if a company we know is being unfairly punished. Basically we can be more nimble and adaptive if needed.

By being nimble and specific we can create a portfolio that better fits us.

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