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 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.

I’m extremely overpaid.

We’re closet indexers to the core.

I have no idea where interest rates are heading.

I’ve been in fake-it-til-I-make-it mode for a few years.

My predictions are worthless.

I’m shutting my fund down because our performance has been terrible and I plan on opening a new fund to start over with a brand new track record.

My quarterly letters are 2-3 pages too long.

Going to an Ivy League school doesn’t automatically make me a better investor.

I’ve been coasting off the performance numbers early in my fund when it was much smaller and had fewer investors and assets.

Risk-adjusted performance numbers aren’t all that helpful.

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

My models aren’t all that helpful but they make our fund appear smart.

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

We underperformed this year and it had nothing to do with the Fed.

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.

 

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

The Compound Media, Inc., an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. 10 Monday AM Reads | The Big Picture commented on May 05

    […] at Risk of 11% Decline (Bloomberg) • Some Things You Will Never Hear From a Portfolio Manager (A Wealth of Common Sense) • Beware Experts Bearing Predictions (Millennial […]