Post 1300 — Changes for David — III

Every 100 posts or so I try to look back and think about where we have been.  At the last century mark, things were very different.  I was employed, though I wondered about the staying power of my firm.

Since then, I have spent time with the staff of the Congressional Oversight Panel regarding AIG.  They used a decent amount of my work in their report.  I have also spent some time talking with regulators, congressional staff, over a variety of things that I write about.  Proximity to DC helps.

Proximity to DC also allowed me to attend events at the Cato Institute, American Enterprise Institute, and Heritage Foundation.  I must admit that I was generally disappointed by what I saw there.  I am basically a libertarian, but one that appreciates that there are some areas that is impossible to be “hands off,” places where average people can’t accurately estimate the deal that they are entering into.  Also, many of the problems of our society are more complex than dealing with tax, spending, and regulatory policy.  In many cases social issues would have to be solved for the economic issues to be solved.  But politicians tiptoe around such matters, because they are not willing to risk their careers without any significant chance of reward.

Since the last century mark, I wrote the “Education of a Corporate Bond Manager” series, and added to my “The Rules” series.  I also appeared on StockTwits TV, interviewed by the estimable Tadas Viskanta.  A half hour never moved so fast.

One more change for  me.  Though I still work from home, I now have an office in my home.  Two of my children moved out, and after shuffling around the remaining five children as they would like it, I ended up with the small room that allows me to concentrate better while my wife homeschools.  I like it a lot, but I miss being able to comment on history, science, and math.  That said, I am guiding the oldest remaining through Calculus.

In terms of new things for the blog, I was sad when my old WordPress format broke and I could not fix it.  I like the new format, and that it loads fast.  I will be doing a lot of book reviews in the near term, and I will be adding a new page to summarize my book reviews by category.  Let me know if you like it, of if it is wasted effort.

I am also looking to do a few small blog fixes to increase contrast, type size, and add a print article option.  I am open to other ideas for improvement, so please comment, and I will consider it.

Changes for David

I have settled on setting up my own asset management shop.  I will manage separate accounts, including services to help minimize taxation.  I will only be managing equities, though I will offer the equities two ways: long only and fully hedged, where I sell futures contracts against the equities, to eliminate market exposure.  My next steps are:

  • Incorporate as an LLC in Maryland.
  • Set up my RIA.
  • Set up an arrangement with a clearing broker, who will provide brokerage, custodial and client communications services.
  • As things get close to being set up, I will talk with those who have expressed interest in the past.

A question to readers already providing separate account management services.  Is there anything material that I have left out here?  If so, would you e-mail me?

My initial minimum is likely going to be $100,000.  Fees will be 1%/year for accounts below $1 million, and slide down from there.  I have some preliminary marketing documents available for discussion purposes only.  E-mail me if you might have interest.  Please understand that all figures in the documents have not been audited.  That said, those that evidence serious interest can look at all of my account statements over the last 10 years, and receive an Excel file that reconciles all of the results to the penny.

Now I may get my track record audited when I get big enough, or if enough people tell me that I have to do it.  I am reluctant to do it before I know that I have a sustainable business.  The auditors charge a lot for what they do, and personally, I’m not sure I would trust the non-forensic audits that they do.  So you tell me, do I need the audit?

Later, once I get going, I would look to set up a mutual fund for smaller accounts, perhaps by buying up the management contract for a failed mutual fund, and using the tax losses to shield initial income for my shareholders.  There are also cheapish ways to set up a series trust for those that want to start a new mutual fund.  I would try those if I can’t recycle an old mutual fund.

So if you have interest in learning about what I am up to, you can e-mail me here.  Beyond that, I live near Baltimore and DC.  If you have a significant interest we can meet.  I will also be in NYC the third week of October, and am available to meet people then, and in Denver the second week of November  for similar meetings.


Finally, as I always do, I want to thank my readers and commenters, even those that disagree with me.  You make my blog a richer place, and I am grateful that you take time to consider what I think.  I write my blog primarily as a means of giving back for all of the good that I have received in society; I hope and pray that it benefits you a lot, and that God would bless you in all matters.



PS — By the way, do I need to take the series 65 exam?