Making money in the markets is hard enough without the added pressure of bloated business costs. The most important thing we can do as managers is to stick to our investing strategy (assuming of course that it’s a viable one). It doesn’t get easier when you maintain an expensive staff, rent out an office space in a major financial hub or spend buckets of money on marketing either. I’d argue that the latter two do not help improve your returns at all, but only benefit the manager.
Michael, you have perfectly articulated some of the downsides of managing other people's money versus trading your own portfolio. Standpoint Funds Management, which I am the Chairman of, has the same 5 people we started the BLNDX fund with on January 1, 2000. Eric Crittenden, the Chief Investment Officer, thinks we can manage another billion with a "B" with only adding one person. Keeping your fixed overhead down, your business model simple and your automation high really reduces the pressures that can come from every direction both outside and inside. I retired from the biz in 2003 and have spent the last 20 years smiling and enjoying my retirement while fooling around with the www.enjoytheride.world website. And, I am driving a 3 year old Kia Sorrento and still consulting on a cloud-based computerized simulation and trading platform trying to make my trading even more efficient. Old habits die hard. Great blog. Enjoy the ride!
No Pressure to Grow
Michael, you have perfectly articulated some of the downsides of managing other people's money versus trading your own portfolio. Standpoint Funds Management, which I am the Chairman of, has the same 5 people we started the BLNDX fund with on January 1, 2000. Eric Crittenden, the Chief Investment Officer, thinks we can manage another billion with a "B" with only adding one person. Keeping your fixed overhead down, your business model simple and your automation high really reduces the pressures that can come from every direction both outside and inside. I retired from the biz in 2003 and have spent the last 20 years smiling and enjoying my retirement while fooling around with the www.enjoytheride.world website. And, I am driving a 3 year old Kia Sorrento and still consulting on a cloud-based computerized simulation and trading platform trying to make my trading even more efficient. Old habits die hard. Great blog. Enjoy the ride!