My goal is to open for business at the beginning of January 2011.? I could have started earlier, but I didn’t feel that giving clients an additional bit of tax data was worth the early start.? In general, I have spent the extra time trying to make sure that I get things right at the start.

Here is my remaining to do list:

1. Decide on Custodian/Clearing Broker ? Any thoughts from Dailey?
2. Compliance Strategy, Including Web Compliance Strategy, CFA Document Retention
3. Procedures for suitability ? CFA notes, Investment Policy Statement
4. E&O Insurance
5. Marketing ? and deal w/e-mail, Linked-in day, other contacts, Press Release
6. Strategy for Illiquid names ? DIIBF, PCCC, IBA, NWLI

Deciding on the custodian/clearing broker is the biggest item, and affects #4 as well.? I am leaning toward Interactive Brokers, because I like their cost structure for small accounts, and they offer a lot of tools to be able to trade cleverly, particularly in an era of high frequency traders.

The downside is that they aren’t good on the service side, which means that I will have to compensate, and be the friendly front end for my clients.

Proxy Voting Policy

I modified the proxy voting policy of one of my readers, and I thank him for his help.? I disagree with him on a few issues, so I don’t want to name him or explain where we differ.? Instead, here is my proxy voting policy, and I solicit your comments.

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Aleph Investments, LLC Proxy Voting Procedures

The Chief Investment Officer shall responsible for voting all shareholder proxies. It will be the Chief Investment Officer?s responsibility to ensure that all proxies are voted in a timely manner. Proxies shall be voted in the best interests of shareholders, with an emphasis on voting against any management proposals that act in general to insulate companies from the discipline of the market or accountability to shareholders.

Specific Policies:

A. Corporate Governance

1. Unless exceptional circumstances exist Aleph Investments will vote against proposals that make it more difficult to replace Board members, including proposals to:

a. Stagger the Board;
b. Overweight management on Board;
c. Introduce cumulative voting;
d. Introduce unequal voting rights;
e. Create supermajority voting;
f. Establish pre-emptive rights.

Aleph Investments will vote in favor of any proposals to reverse the above.

Generally, Aleph Investments will withhold its vote for directors who hold little or no stock in the company and have been on the Board for three years or longer, or for new directors who appear to be primarily political or show appointments who do not appear to possess skills or knowledge that is relevant to the company’s business.? Aleph Investments also favors separating the roles of Chairman and CEO, and not having the CEO on the nominating committee.

For companies that have not given us an adequate rate of return (subjectively determined), we will vote down all questions and positions proposed by management, including the auditor.

B. Takeover Defense and Related Actions.

Aleph Investments generally will vote against proposals that make it more difficult for a Company to be taken over by outsiders, and in favor of proposals to do the opposite. The reason for this is that we believe that corporate management should be subject at all times to the incentives and punishments of the market, not insulated from them.

C. Compensation Plans.

Aleph Investments generally will vote against most large incentive pay proposals, with the exception of those that are meant to apply to ordinary employees.? Most of the time, management teams are paid well enough; it should be enough incentive for to have moderate incentives, and know that if you can?t deliver, you will be replaced, just like the rest of us.? Once management teams get too well off, they tend to underperform.? Also, we prefer management compensation to be tied to things management/workers can work on, like net operating income or change in book value, rather than stock valuations, which they can?t affect much.

In addition, Aleph Investments will vote against any compensation that would act to reward management as a result of a takeover attempt, whether successful or not, such as revaluing purchase price of stock options, golden parachutes or handcuffs, etc.

D. Capital Structure.

Aleph Investments generally will vote against proposals to move the company to another state less favorable to shareholders interests, or to restructure classes of stock in such a way as to benefit one class of shareholders at the expense of another, such as dual classes (A and B shares) of stock.

E. Noneconomic Proposals

Aleph investments will generally vote against noneconomic proposals.? We expect firms to follow the law in the places in which they operate, and to observe general ethics beyond that.? We don?t want firms to follow the ethics of tiny minorities who submit proxy proposals.

F. Size of Board

Aleph Investments will vote against any proposals that act to increase the size of the board beyond
12 – 15 members. We believe generally that large boards have a more difficult time with major changes and other important decisions, and that responsibility is more easily avoided and diffused among too many members.

G. Appointment of Outside Directors.

Aleph Investments will vote against any proposal to allow the CEO to appoint outside directors, and in favor of any proposal to eliminate this ability. The Board’s outside directors should not owe their position or allegiance to a member of management, but to the shareholders and/or independent board members alone. For the same reason, we may vote against any outside Board member who has business dealings with a company on whose Board he sits. Allowable exceptions may be venture capitalists who helped bring a company public, and have a great deal of industry knowledge; senior management of companies in industry sectors served by the company, and who may have valuable insight to contribute regarding industry competitive and business factors; and similar factors that may contribute to the knowledge level of the board members.

H. Multiple Director Positions

Aleph Investments will generally vote against any Board member who is also a Director of four or more different companies. Multiple directorships are time-consuming, especially for senior management of other businesses who have other full-time jobs. We find it difficult to believe that in such cases the Director can adequately fulfill his or her responsibilities to the shareholders.

I. Incentive Stock Award Programs:

Aleph Investments will vote against incentive stock awards that act to concentrate significant amounts of stock in the hands of upper management. While we understand the need to incentivize management by placing a significant amount of upper management and director compensation and net worth at risk in the stock market, this needs to be meaningful only at a personal level. It should not necessary to set aside a significant proportion of shareholder capital for a limited number of upper management personnel in order to incentivize them.

Aleph Investments will support proposals that force executives to put their own money on the line in company stock in exchange for other incentives.? We are putting our money on the line, so should managers.

J. Conflicts of Interest.

Due to the nature of our business and its small size, it is unlikely that conflicts of interest will arise in voting the proxies of public companies, because Aleph Investments, LLC does not do investment banking, or manage or advise public companies.

Full disclosure: long DIIBF, PCCC, IBA, NWLI