You cannot make forward progress without active discussion, and I do appreciate how active you are on these boards. Your point of view is of value and I am not trying to discount that.

No need to mention companies, but what markets are NOT risky? Why aren't global money managers pouring all their money into these non-risky, perfectly legitimate, high-return markets? Why isn't this all over the news?

These markets may not be risky in your eyes, because of your knowledge/experience/strategy, but my concern is that your understating of the risks involve in global investing may entice those investors inexperienced in global investing to invest and possibly expose themselves to economic risks that simply do exist.

Quote:

You don't know what experience I have so please do not comment on that.

You have simply never quoted your experience. Nor have you provided any source material supporting your view. Most investors are investing for long-term goals, and they will be concerned with long-term historical performance of certain strategies. Nothing against your hedge fund strategy, but it seems still in its infancy, without any long-term historical performance. THAT is the experience I am speaking to, not your personal experience.

When you say, "global equity markets are not risky", you are saying that there is NO RISK. This is a slap in the face of every economics professor in EVERY COUNTRY. The markets have their risks, but you can use strategies to minimize or eliminate some level of risk. All your talk is that risk doesn't exist for these markets, and that perception is just flat out incorrect.

There are a myriad of reasons specifics cannot be disseminated. For example, I cannot get too specific because of my licensing. Providing specific companies to invest in can and will get you in hot water, even if you don't have any licensing. That being said, it doesn't mean that examples cannot be used, nor discussed.

The type of risk you are talking about is "manager risk", NOT "market risk". Manager Risk is the risk associated with the knowledge/experience/aptitude of whomever is managing your investments (this includes yourself). Your "manager risk" is non-existant because you believe that your knowledge and experience mitigates any risk in making bad investment decisions. That's perfectly fine. But "market risk", "currency risk", and others can only be hedged/mitigated by specific strategies that the common investor may not be aware of. Your broad statement that anything is "not risky" does not apply to the vast majority of those that read this board.

Never said it doesn't work. In fact, I've been rather supportive of hedge funds and alternative investment strategies. However, people need to make decisions based on FACT, not ILLUSION. You paint a picture of global investing being "not risky", when in fact there are many risks associated with this type of investing.

This is true. As far as my background, however, you know very little of mine as well. Which is why I prefer facts and proven strategies until someone can prove me otherwise. I'm very open to new ideas, but someone needs to convince me that their idea is worthy of further investigation.

There are many ways to manage risk, thereby "insuring" a strategy/position. Options are one of the most common, and effectively used they do very well in hedging investments. However, there are some situations that cannot be insured by any other strategy than involving an insurance product.

Hey I'm not angry with you at all. I did feel that your comment in regards to "insurance agent financial advisors" was ill-conceived and unwarranted. These people provide tremendous benefits to their clients and to put them down simply because they don't prefer to put their client's money in risks that their client's cannot handle or not comfortable with is ridiculous.

The markets function exactly as you say. If everyone did the same things then the market would either get entirely out of control (tech bubble in the US) or crash entirely. This is a danger that exists today in stock markets that did not exist in the past. Today you have unprecedented access to markets on the individual level, and individual investors fall prey to emotions more often than professional investors. This only serves to make the markets more volatile, and also more dangerous. We are venturing into times filled with unknowns, which will make things interesting to say the least, but challenging none the less.

Mynion,

I agree with you. You cannot make any forward progress without active dicsussion and furhtermore, there cannot be an active discussion without at least two different oppinions on one subject.

One thing I beleive I need to clarify here:

I have never said that investments in mature global equity markets carry no risk or 0% risk. I have said they are, in my opinion, not risky but that does not mean there is 0% risk. Look at Money Market Mutual Funds (not Money Market Accounts). They are not risky investments but there were at least two funds that caused investors to loose roughly 4%. My point is that they are not risky investments but they do carry a degree, a very small degree, of risk. The same is true for mature global equity markets. There is a degree of risk but I say that the amount of risk is very tiny but only if you have the knowledge.

Why is it not on the news?

Well, you should ask the people in charge of the news. Whenever you have somehting that goes against the crowd it is viewed as something not realistic until it reaches a certain size and cannot be ignored anymore.

Why are global fund managers not doing it?

They lack the knowledge. The majority comes from a similar very poor back-round, at least in my opinion, which means their foundation is very strong and if you built on a weak foundation the end results will be lousy. There are very few companies that do that and they have figured out the strategies and do have the knowledge to invest and trade in any market with a limited degree of risk to them.

I agree, that is a slap in the face for every economics professor in every country. I believe their economic models are worthless and they do not work in the markets. Alan Greenspan is just one example who understood that and that is one reason why Ben Bernake is sucj a terrible Fed Chief, in my opinion.

You cannot study any valuable thing about investments in any educational facility but the majority believes that you can which is the reason why I say they come form a similar poor backround and this is the reason why there is an entire industry of professional which to a terrible job with investments. Over 70% of mutual fund manager even underperfom their benchmark index, the average, which is a very low investment goal to start with.

I agree with you that the risk can only be mitigated by strategies that are not available to the average investor. They need to seek the advice of companies that have that knowledge. One thing that I just think is flat out stupid is that it seems to be ok to tell an investor to go with a mutual fund, a company which will manage money for you for a fee and give you advice for a fee, but it is not ok to say go outside the mutual fund industry and seek advice from other companies, which will give you advice for a fee as well. True enough, they are very likely to charge you more but if that is justified by the service offered and if in the end you still have a better investment result then is that a bad move by the investor?

You claim that Insurance Agent Financial Advisors do not want to put tehir clients money at risk. What makes you think that companies and advisors outside the indsustry want to put their clients money at risk?

I sure don't. There may be some companies that are willing to do so but when you have huge industries and plenty of participants then there will be companies that are bad companies to do business with and you know that even the insurance business is filled with terrible companies. I just think to say that Insurance Agent Financial Advisors don't want to risk their clients money but the rest wants to do so is a false statement.

I also agree with you that there are many way to manage risks and different risks require different solutions.

There are factors no investment/portfolio manager has no controll over which is the risk I think you refer to. However, with the knowledge and strategies in place the risk will be so small that those companies will refer to those markets as not risky.

One last thing I want to ask you just out of curiosity and you don't have to answer that question:

What would it take to get you to contribute 10% of your portfolio to such an investment strategy?

I don't want to convince you to make any adjustment to your strategy. Not at all but I would like to know based on what information would you even consider to make a small adjustment. Once again this is just out of curiosity.

I asked because you said that you are open to alternative investments but you need to be convinced and I just wonder what it takes for you to be convinced.

__________________
It is not smart to play it safe but it is safe to play it smart.

My business is significantly different from a traditional advisory business, and therefore both my client's assets and my assets are managed leveraging strategy over product.

Therefore, I help my clients make better decisions, by giving them factual, verifiable information in order to see for themselves which strategies will put them in the best position for financial security. Basically, we play "what if?" scenarios, look at the outcomes, and I let the client decide, although ultimately I have a fiduciary responsibility to make recommendations that are in the client's best interests.

Now, I'm open to new ideas, but what I need (and ultimately my client's need), is information based on facts and figures that is verifiable in nature, from solid sources (not some silly website that anyone can put up). My clients are going to ask the same questions I would, and if not, I'm going to bring those questions up anyhow, because they absolutely need to know.

I wholeheartedly disagree with you in regards to your statements involving economics, economics professors, and institutional money managers. These are some of the most well-educated people on the planet, and they have doctorates and degrees that some people would die for. There are no economies, investment opportunities, or products that have not been reviewed by a professional money manager, especially institutional money managers.

I have never said that they are not well educated. I simply said that what the majority has studied is very poor or to put it in other words they are well educated with very poor information.

I you are impressed by their degrees, fine. That's a personal choice but keep in mind it is not important what type of diploma or doctorate they have or how many but what they do with it. Their degree simply prooves that they did a good job memorizing certain things or put their well-educated minds fed with poor information to work and create more bad strategies, assumptions and economic models that should work in theory.

I do listen to what they have to say but the majority, at least in my opinion, is comparable to stand-up comedy. It just amuses me and who doesn't like to laugh. It's healthy.

Can you share some of the questions you and your clients need to get answered when you evaluate new strategies/ideas?

__________________
It is not smart to play it safe but it is safe to play it smart.

Hermes wrote:
Thank you.

Quote:

Why should a smart professional fund-manager lose 25%?

For the exact same reason Executive Life Insurance Company in California and Kentucky Central Life Insurance are no longer in business. They strayed from sound money management with the allure of $$BIG$$ gains forever and a day until they went out of business.


Hermes asked:

Quote:

Why do only Insurance Agent Financial Advisors talk about losses?

Because Stock Broker Financial Advisors only talk about 30% gains as if that is the norm when in fact it is a once in 25 year occurrence.

The above graphic is a day trader having a bad day!

Then Hermes writes this:

Quote:

The industry will point to that risk but not to their lack of knowledge and then try to sell you instruments to limit those risks.

Hermes, people don't live forever and at some point in a person's life they have, for all intents and purposes, made all the money they are going to make and the preservation of their cash asset and the distribution of same to their heirs and beneficiaries becomes their utmost concern along with insuring a comfortable living for themselves as they ride off into the sunset.

Wouldn't you agree?

__________________
Gary Spicuzza, *SAFE
Copyright 1956
No Rights Reserved
*Self Appointed Financial Expert

Gary,

those two companies that you have mentioned went out of business but those managers were not smart. They became greedy and have made severe mistakes. The hedge-funds that blew up made mistakes and that's why they are not around anymore and the same holds true for any company in any industry.

Any smart professional fund manager will not face losses on an annual base, regardless of the market they participate in. If they do they should at the very least say that they have messed up and don't blame it on anything else.

I 100% disagree with you that 30% gains are once in a 25 year occurence. They may be for the mutual fund industry, I agree with you on that but there is a reason why the entire mutual fund industry and its fund managers are the worst professional managers in todays markets.

Other companies, outside the mutual fund industry, have no problem at all to achieve those returns.

I do agree with your last point. Yes, there is a time when an individual has made all the money desired and just want to ride off into the sunset...

__________________
It is not smart to play it safe but it is safe to play it smart.