It's a wonderful life being a fund manager

[Parttimer]

Hi Guys, I'm disillusioned!!!!! Now that I've been investing my own money with acceptable returns, I see how my money was been wasted on fees payed to incompetent fund managers. Having gained a little knowledge on the markets, its interesting to hear responses when you are questions regarding business in which these guys are putting your money into. Most of these guys are just "high level" bull*****ters and if only the public would just take a little time to read, most people would realise just how badly they are being done in. Three years ago I asked Mr Paul Theron ( the big TV resident expert>>JOke)to invest R100k in 4 R25k lots of small caps. Here's what the bonehead picked, AC Towers, Hardware Warehouse and WG Wearne. I made the last choice of NAspers. Except for HW and my pick, the other two companies when bust. A year later I made my own small investments in Ellies, Coronation and Pinnacle. Here's a guy who professes to be great at investing and here's me the novice!!!!Are these guys for real!!!!

[warhippo]

The resident expert was buying (or was it selling?) African Bank at R23 and falling - as stated: it was "his"? money. But maybe hindsight is always 20/20. Prefer to do my own thing as well.

[Franksays]

He also bought Facebook with his own money when it listed. I remember telling my wife if i wanted to own a company that makes money out of advertising then id buy an ad agency not FB! I don't think he's a bad guy, but you must understand your reasons for investing in a company and their management before you take the plunge.

[SimonPB]

Parttimer some thorts, and not for a moment distracting from your experience .. Paul is not a small cap stock picker, he never has been and if you chatted to him or watched him on TV you would have known this fact .. and equally he should have declined your money .. the Vestact portfolio (which includes NPN) has done 23% per year inclusive of fees over the last decade vs. a market return of 17.7% - so he knows his stuff, but that stuff ain't small caps ..

[#5]

and did you try to ask him a year later if he would revise his portfolio weighting on new info regarding each of those stocks? ACTowers was all the rage at one stage, with huge growth prospects in Africa. How was anyone to know that they wouldn't be able to keep up with the huge influx of international players into the African market, or the massive advent of cheap chinese contractors? The point is, to be fair to Paul, you needed to ask at what point in time he would have ditched his losing picks?

[Rams]

and he being a fund manager, thats his job....thats partimers point....he gave him the money to invest, now its worth nothing(and remember this i suppose is investing , not trading)...

[#7]

he gave him the money to invest, and pretty much told him the strategy to adopt (4 smallcaps) - he didn't say he gave him the money to manage. There is a difference

[reyden]

80-90% of fund managers under-perform, that a world wide stat. Reasons are various

[Rams]

yeah, same as saying he was told to fly the Asiana Boeing 777, but not land it...same difference

[warhippo]

Simon, these are very nice numbers and really worth looking into - where can one get more info about this?

[klapka]

http://www.vestact.com/pls/pub/pub_misc.preview?p_id=5511

[warhippo]

Thanks klapka for that - appreciate. I am still trying to figure out whether it is their personal or clients portfolios that made these numbers? "this kind of consistent market beating investment performance is most uncommon!"

[SimonPB]

hippo, it client portfolio, they have model portfolio on their home page and sent an email out a week or three back with the stats re first 10 years

[Harathke]

Model portfolio = model performance. Would exclude entry/exit, bidding spread, intra-day volatility etc. Does the "after fees" include brokerage and their management/performance fees? Tax and CGT too? How are they taking into account weights of stocks in the model portfolio? Do they automatically re-adjusted the weights as the stocks move? At what period/duration etc do they readjust? Too many variables for a model portfolio to be taken as a real investment track record. 23% is good, but its also open to lots of loopholes due to only actually existing in a spreadsheet after the fact.

[Rams]

is there a standard to average out performance?..you could easily choose 2 good points and the right number of years to feed into the stats

[CHATTYCHAT]

What you're saying - the 80-90% (now is it 80 or 90?) fund managers do not meet the set benchmark and the corresponding mandate which goes with that?

[Rams]

depends ..if you a fund manager its 80%, if you a sucker, then its 90%...i not stutter today

[partridge]

Following this is like being in Bedlam - large pockets of ???? and here and there someone who is possibly a genius/ has a gem to offer. There is possibly one thing worth mentioning that due to my low functioning intelligence has taken years to sink in. The private investor has the option of taking up positions that the serious professional will not even look at- one example - the market tradability of a share.... they can't due to the size of their funds take up what would amount to for them silly little positions - like I can.

[partridge]

another thing. Fund managers who invest long term in their own funds.

[Parttimer]

Guys, my attack was not at Paul Theron (who uses all Buffets phrases if one takes the time to read Buffets annual reports and autibiographies). My point being is that one does not get real value from these clowns. Simon, just for your info, here's my stats and you can go check it on my brokerage account. Since 4.5 years by one portfolio is up 145% and my other (which I started in Jan 13) is up 16.5%. Not bad for a novice who took an hour a day to read. My point is that as the on line share trading platforms start to educate people on how to invest, people can then do it themselves. let these greedy fund managers work hard for their fees if they want our business. That's my point.