Wednesday, April 25, 2018

Registered Investment Advisers

Low Fee Alternatives

1. 35bps, $500 Mil AUM as of 4/15/2014
2. 25bps, $800 AUM


Risks in Investment

Over last 8-10 years of investing for myself, friends and clients in individual stocks, mutual funds, hedge funds I noticed that the headline number that gets most attention is returns. In how many years will this investment become 2x, 3x or will it return 5%, 6%9%,20% per year. Not enough ink is spent on how things can go bad for the investment. If I do not pay serious attention to honestly recognizing how I will lose money in an investment, at some point $1,000,000 will become $0 when invested in series of bad investments that lose value over time.

If it is an investment in public/private company: How will the underlying business lose customers? How will their products become obsolete? How strong are the competitors? What could blow their costs? How good is their intellectual capital? Do they attract outside talent? How did it do in previous recessions? How did it do post recovery? As I make investment, I document responses to these questions using conference call transcripts, message boards, news letters I subscribe to, asking your friends, measuring against industry trends, talking to relevant people working for the company, suppliers or its competitors.

Tuesday, May 31, 2016

Resources to get started in investing

For those who are interested in investing. Below are few books, blogs and videos that helped me navigate the complex world of investing. Feel free to leave a comment or suggestion.

1. Money - Master the game This is the big picture book. Helps in connecting in your needs with world of money out there.


2. Intelligent Investing  by Benjamin Graham. I read this atleast two times and is my go to book when I get confused about how to go about investing.
3. Berkshire letters to shareholders - Warren Buffet. At a lunch meeting for investors in his fund IVWIX, when I asked the founder Charles de Valulx what books he recommended to make me an investor. He said just read and re read Warren Buffet letters to investors.
4. Buffett - Making of an American Capitalist - Roger Lowenstein A fascinating book on the effort Warren Buffet put in mastering his craft of investing and his methods.
5. Pool Charlie's Almanack - Charlie Munger. Charlie Munger is partner of Warren Buffet. A very engaging read. He also has his own reading list at the end to get you going on his way of thinking. 


6. CFA Level 1 and Level 2 curriculum on Financial Reporting and Analysis and Corporate Finance found here

If you are going to be picking stocks then you better get good at analyzing finanial statements and understand accounting.


Knowledge of statistics is critical to quantify movement in prices of assets. 

6. CFA Level 1 and Level 2 Curriculum on Quantitative Methods found here


7. Common Sense on Mutual Funds - John Bogle. Great read on funds performance relative to various indexes. 


8. One up on wall street - Peter Lynch. Discusses how common man with focus and attention can have an edge over professional investors. Easier said than done. 

9. Expectations Investing - Co Author Michael Moubassim. Seeks to answer the question, what is implied in prices of a given stock? What growth rates? What risk? What returns?. He also used to pen Moubassim on Strategy, an investment oriented research papers.  They may also be worth looking up.

10. Security Analysis - Benjaming Graham and Dodd. Classic favorite of pros like Warren Buffett and other investing greats. Long read.

11. Common Stocks and Uncommon Profits - Phillip Fisher. Great book on fundamental analysis loved by so many buy side analysts.

12. 5 Keys to Value Investing - Dennis Jean Jacques. Takeaway for me here was finding a company that was taken over recently and using that as one of the inputs in your valuation model. 

13. Value Investing - From Graham, Buffett and Beyond - Bruce Greenwald. Has some good case studies. 

14. Little Book that beats the markets - Joel Greenblat. He ran very successful hedge fund Gotham Capital and has distilled value investing tenets into a quantitative formula. "How to be a stock market genius" is another book that has been highly recommended by many sources. At some point I will try to read that as well. 

15. Investment Valuation Ashwath Damodaran. I use it as reference when it comes valuing any asset. 


16. The little book of trading - Michael Covel. Good review of some top trend following investors.

17. Market Wizards - Jack Schwager. This has been recommended from several sources.


18. Mebane Faber at Cambria Invesments has this great book available for free. These are models used by leading investment houses such as various endowments. 

19. Wealthtrack by Consuello Mack. Interviews with some of the best practitioners of the craft of investing. 

20. 5 Things I do to become a better investor Tim Ferriss. Tim Ferriss is an angel/startup investor. So if you are into public markets then you may not want to follow him word to word. However he high lights some general principles behind successful investing. 

21. Damodaran - Ashwath Damodaran. I am a big fan of prof Damodaran at NYU. Never miss to read his posts. Sometimes I also follow him on his investments. The investment valuation model I use is borrowed from him. 

22. Corp Finance, Investment Valuation and Investment Philosophy  All classes on these topics taught by professor Damodaran. 

23. Mutual Fund Observer  This is a great site with manager interviews and deeper fund analysis.

Thursday, May 8, 2014

Trading in Markets (Contains links to articles)

Info on all topics related to trading
Almost 40 percent of U.S. equities now trade away from exchanges, in dark pools and other off-exchange platforms, up from around 16 percent six years ago

Tuesday, July 19, 2011

Choosing a Career

Ideally you want a system in society, where people get opportunity to learn variety of subject matter, skills through education, work. Complementing that you also want people to learn about themselves. Learn what motivates them, learning drives genuine curosity in them. Ideal career would then be combination of skills that matches the natural temperament and aptitude of the individual. If the society as a whole can achieve this then country housing such societies would have no limits. Companies such as Google, Facebook, Investment banks have achieved such results. We just need to find a way to scale this.

Sunday, July 10, 2011

Investment Portfolio Optimzation

Themes driving weighting or sensitivities to each of the asset classes within a portfolio:
  • The correlation of the asset class with other asset classes in the portfolio. Want lower correlations. E.g have equities and commodities in the portfolio. When equities are doing bad, the commodities are either steady or going up.
  • What is the proportion of the asset class relative to the total market portfolio consisting of equities, fixed income, commodities, natural resources. Like to weigh more towards the expected asset class that will make up for majority in future.
  • Expected return vs the downside risk. Assign more weight to asset class whose expected return is very high vs downside. E.g double down on equities/fixed income during the market lows of Oct 2008 or March 2009
The expectations for the above three mixes are shifting constantly with the change in economic environment constantly but adjusting the portfolio the advantage of unusual situations should yield satisfactory outcomes vs the do nothing portfolio.