Since I started working in the investment management business after receiving my MBA at Harvard,
I have followed Benjamin Graham's advice in "The Intelligent Investor".
Mr. Graham was Warren Buffet's professor at Columbia University, and
is considered the 'grandfather' of portfolio management. His philosophy is to buy companies that have excellent
management, desirable products or services, and are in prosperous businesses that are customer oriented.
Until recently, brokers had exclusive access to accurate and timely market data, combined with the ability to trade efficiently. So in order to manage money effectively, one had to work at a brokerage house - as I did at Goldman Sachs. The internet eliminated those advantages by making the tools available to everyone. Working independently allows me to be much more objective, and to focus more on my clients needs (as opposed to corporate bureaucracy).
Portfolio managers frequently make two mistakes: they hold too many positions, and are too active; usually reacting to market events. Portfolio theory suggests that a solid, effective portfolio have between 20 and 30 stocks. Fewer than 20 positions, and there is too much exposure to one name; more than 30, and returns become similar to an index, as each stock represents such a small percentage of the portfolio. The best companies within the most attractive sectors should be identified and bought. Adjustments to a portfolio should only be made when something fundamental occurs: strategic or management changes at the company, or events that impact the entire sector.
Unfortunately, the incentives for most money managers or brokers are not aligned with their customers: there are either incentives to trade actively (commissions), sell proprietary products which have hidden costs and are not efficient (e.g. funds, complicated structured products), or sell stocks of companies with which their bank has a relationship (i.e., they are not neutral). I manage portfolios through Charles Schwab, the highest rated on-line broker, where I have limited power of attorney. I charge a fee and bill quarterly based on assets under management. Alternatively, I will work on a consulting basis for a one-off a portfolio analysis and recommendation.
I bring a focused, disciplined approach to money management, trade infrequently, and have very satisfied customers. I explain the markets and investing in clear language, and augment my knowledge by reading the financial press (Wall Street Journal, New York Times, Forbes, Fortune, Business Week), maintaining my contacts at several investment banks, and nurturing my business school network.
Please contact me via phone or e-mail if you have any questions or would like additional information.
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