Some Things You Will Never (Rarely) Hear From a Portfolio Manager

“Wall Street people learn nothing and forget everything.” – Benjamin Graham

Portfolio managers have to be careful what they say in the press, through marketing materials and with clients.  This is because, whether they admit it or not, they are first and foremost in the sales and marketing business (not that there’s anything wrong with that – they have to get clients somehow).  With that in mind, here are some things you will likely never hear from a portfolio manager:

Our back-test results don’t look so great in all environments.

Our fee is actually a little high.

Now is not a good time to invest in our strategy.

We got lucky.

Any edge we claim to have is razor thin in an ultra-competitive market.

Our strategy is not that unique and is employed by hundreds of other funds.

Our back-tested results are full of all sorts of biases and data-mining.

Yes, we are gathering assets.

We have no idea where the market is going this year.

You’re right, our price targets are not an exact science.

We’re not going to make any changes in the fund for a while.

We really have no expertise in understanding the macro, big picture stuff, but it really makes us sound smart to our clients.

We underperformed because it’s difficult to beat the market after costs.

We could be wrong.

Our strategy will be out of favor for a while.

Our fund is getting too big.

We made a mistake.

I don’t know.

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