As the market continues it scamper skyward, it seems that everybody wants to get back into the game. The questions about fund managers have been running rampant for the last week or so. Everybody is trying to figure out who is and who isn’t worthy to handle their assets.
I don’t see that I have the skills needed to manage portfolios or to make investment decisions on individual positions but instead I believe that my skill set is more suited to picking managers. So when tasked with these questions, I’m happy to provide what if any answers I deem appropriate.
It all comes down to process.
I don’t know of any other industry where people believe they are capable of doing the job of professionals with little or no training. I guess there are some jobs out there that I could do if I wanted to without going to school or learning the trade, but for the most part it would take some time and education. When it comes to picking stocks, though, everyone thinks he or she can do it and do it better then everyone else, or if not better, at least as good as the next person.
Read an article or book and BAM (or should I say BOO-YAH?), you’re an expert.
I don’t think so.
I think it takes time, I think it takes experience, I think it takes patience and I think it takes conviction in a strategy or process that develops over time that makes someone a good money manager. Sure, there are people who can read an article on Saturday and put an order in on Monday and make money Tuesday but is this sort of thing repeatable? I don’t think so. In fact I know it is not.
It’s a fool’s errand to think that watching a television program or reading an article is going to give one the right amount of information to make money over and over again. The reality is just like any other job: Picking winners is hard work and should be treated as such.
So to those who want to know what makes someone a good stock picker, the answer is simple: They need to know what they’re doing. They need to have a process and they need to have conviction in the process to stick with it during good times and bad. And most important for you investors, you need to understand what’s happening with your money when you give it to them to manage.
It’s easy to add winners to a portfolio after they have started to run; it’s hard to find the names while they’re still in the starting blocks.
Manager selection and marketing are two of the topics that are going to be covered during Hedge Answers – the conference call series. Check it out atwww.hedgeanswers.com. It is going to be great – you don’t want to miss it. Register today!
THINGS THAT DRIVE ME CRAZY
I’m happy to report that nothing happened this week worthy of this area. Oh, wait a minute, the Red Sox lost and baseball is over for me for the year. It was fun while it lasted; I just wish it had lasted a few more games. Losing like the Sox did on Sunday brought back many memories of the pre-2004 era and none of us need to go back to those days.