Delta Financial is the only way to go. Follow Pabrai....Lol.

Even with Delta Financial, Pabrai's fund beaten Berkshire Hathaway since his launch, and I've crushed Berkshire since I started managing money full time. Obviously we have some size advantages over Warren nowadays. Everyone has losers, and Delta was a minor blip for me that I actually traded for a profit before taking a loss when I bought it back on a decline.

But once again, if you want to recommend Berkshire, you should be able to explain how to value it. So what's an attractive price to purchase it at, and if it runs up strongly, where should it be sold at? Given you've ducked these questions, and instead choose to snipe anonymously, my guess is you don't understand how to value it at all. If you did really understand Berkshire, you'd be aware that Munger and Buffett said yesterday they'd be "thrilled" with 10% annualized returns going forward.

http://www.reuters.com/article/busin...BrandChannel=0

Jively, I get it but it doesn't make it any less ridiculous. Lawyers pay copy boys 8 bucks an hour and bill clients .2 hours at $400 per hr to send a fax too. It is what it is. Puts food on the table and as long as you confess to robbing someone before they agree to let you plunder them, it's all commerce.

Here is my exact portfolio.

% of Portfolio
Symbol
Name
Market Sector
Expense Ratio

10
SPY
S&P 500
US Large Cap
0.09%

10
VTV
Vanguard Value
US Large Value
0.11%

10
IWC
iShares Russell Micro
US Micro Cap
0.60%

10
VBR
Vanguard Small Cap Value
US Small Value
0.12%

10
VNQ
Vanguard REIT
Real Estate
0.12%

10
EFA
iShares MCSI EAFE
International Large Cap
0.35%

10
EFV
iShares MCSI EAFE Value
International Large Value
0.40%

10
DLS
WisdomTree Int'l Small Cap
International Small Cap
0.58%

20
VWO
Vanguard Emerging Market
Emerging Market
0.30%

FYP

lol at someone managing 1-10 mil for 10-30k per year. If that was the case, almost anyone would probably gladly pay someone to do the management for them at those prices.

[ ] Put most of it into a broadly diversified total-market fund. One that tracks the Wilshire 5000? Once every quarter-year, have them send you a check for one percent of the fund's current balance.

[ ] Hookers and blow, baby. Hookers and blow.

[ ] Just give it to me. Problem solved.

Well, this seems to have turned into a bash advisor thread. stephen, I think you are out of line. My company is fee-based so there are no commissions; I recommend a passive globally diversified no-forecast investment portfolio so there is no "useless investment ideas" and no churning.

There is a large percentage of high-net-worth investors that can't make their own investment decisions. It takes a lot of discipline to do it on your own, and to not tilt. Our clients' long-term returns, after our advisory fee, is probably significantly better than they would do on their own.

-Tom

jively,

Are you really charging .1-.3% commissions? Or is it closer to 1%?

1% would be grossly high and .1% is grossly low.


Though to be fair most people are ******s. I just don't see why you charge someone more to manage 10 mil than 1 mil. Are adding zeros that hard? Could you outsource it and cut some costs?

i have NO CLUE what you guys are talking about. why aren't you railing on hedge funds for the 2%??

is it that much harder to "manage" 100mil, than it is to manage 30bil?? sure, it costs maybe a bit more, but c'mon...

basically, the answer to your question in bold above is:

no. they charge that because they can.

and the logic is correct, the people who are willing to pay 100bps:

a) are not smart enough/dedicated enough/ have enough time to manage the portfolio on their own and thus would easily cost themselves more than 1%/year if they did it themselves.

b) are not smart enough to realize that what the advisor could do with 10mil they could easily do with 100mil.

all the "small cap" "value" fund stuff is simply reliance on past trends with no logical basis for that outperformance (i.e. why isn't the bias priced in and thus expected to be nil going forward?).

if the funds REALLY wanted to add value, theyd use leverage to increase the risk/reward of bonds/IL bonds and other less risky products in order to generate true diversification and provide highly targeted returns.

that is the investment strategy of the fund that i'm building for the future (once i figure out the LEAPS vs. -or in addition to- futures thing).

and my fund will not charge over 100bps and i GUARANTEE you that it:

a) is way harder to administer/manage than anything any traditional advisor does

b) will provide way more return per unit risk.

so overal, advisors are NOT useless at all to their clients (ie. their clients are not smart w.r.t. their ability to manage their own money/realize they could research it and do it more cheaply etc.) AND they charge those fees because they can (and they provide a service).

Barron

Barron,

I take people from people who're bad at math on a daily basis. I don't try to church it up like I'm doing them a favor though. I take money from the stupidest people I can find with it and try to relieve them of it as fast a humanly possible. If I was to think I was doing them a favor... I'd be in error. I just abhor advisors trying to say that they're doing something other than essentially price discrimination.

tom said this:

i think that is in agreement with what you said (though he doesn't explicity call it price discrimination though it inherently is).

Barron

EDIT: thinking more about price discrimination (PD). is charging 1% of AUM relaly PD? from memory the definition fo DP is simply charging one person a different rate than another. but the 1% is flat rather than discriminatory and charged unvariably...

Probably the best advice on the thread. Invest in your own financial education. Properly invested $2 million can provide you with 70-80K in income that will increase at rate of inflation for the rest of your life. Currently investment income is taxed at lower rates than wages so this is roughly equivalent to a $100K a year job. This hopefully will be enough for you to live on.

The most important thing to do is to avoid doing anything really stupid. Like the following.

• 1. Investing to Aggressively: Get rich day trading, highly leveraged real estate, option trading
  2. Investing to conservatively: Stick all your money in CDs and/or money markets for long periods of time, because inflation will eventually kill you
  3. Gambling: Having more money doesn't make you a better poker player, just a bigger target
  4. Consuming too much: The easiest way to stay a millionaire is to not spend like a you are one. Every week I play poker with guys that say, man I'd do such and such if I was a millionaire. I look at the stuff they buy, amount they gamble and say to myself no way you'll ever be one.

I'd also suggest checking out this forum on early retirement/financial independence. We have many folks like myself who retired early as well as a fair number of 20 somethings, a few in your situation.

I said our ideal clients have between $1 and $10 million of investment assets. We are not managing $10 million for any client.

Our fees are higher than 0.3%.

-Tom

Tom,

I was trying to give you the benefit of the doubt. My point is that you are price discriminating and likely providing them a huge utility loss over Vanguard/ETFs and an hourly adviser each quarter.

Give him a break. He said he charges a flat fee, not a percentage. His clients are obviously too busy or too dumb to care about the fees. They are probably doing better than they would on their own, or with another percentage based advisor.

Sorry for your loss and good luck with whatever you decide to do.

I have no financial advise to offer accept to appreciate everything you have been granted in your life. When my father died when I was 23 I inherited a brand new mortgage payment of 180k, a car payment, and a jobless emotional mother. Been a bumpy road, and has put my life in reverse at the moment also.

Eventually, maybe give back to the community in a some small way, take a great trip with some of the people you really love and care for. Create great memories and enjoy life to the fullest.

I believe that the idea for small cap funds is that they are riskier and therefore (with a few steps of reasoning in between) will yield a higher return.

I'm not sure what the idea behind the value stocks are but a guess would be taking advantage of cyclical stocks and making people sell high/buy low.

Some very poor advice in this thread. 'bad time to invest' 'buy a property' 'pay an hourly rate to learn finance' 'buy vanguard funds [only]'. Actually learning some finance would be a good idea but whatever you do dont invest for yourself yet.

The path above (following specific investment advice on this forum) will inevitably lead to you having an inefficient portfolio (it all comes down to return per risk), which in poker terms for you is like having a huge leak in your game.

OP: Take out a plan with someone who manages portfolios, explain your situation and he should be able to come up with the (well diversified, tax optimising, passive) portfolio you require. Your portfolio is more than big enough to justify a few expenses. Not doing this is like going to the high stakes game and listening to someone say 'open raise the following, and play this, its good'.