My success with clients over the past quarter century managing their financial assets comes down to one thing...my disciplined investment process. I am “rules based” advisor which keeps me and clients “out of trouble”.
If you have been reading my past articles you know I like to use analogies to explain a complicated theory. Today I will compare one of the “Greats in the Golf World” with portfolio management.
When Tiger first started playing golf, he was going to break all the records. The projections on this guy, based on what he had done at such an early age, were that we would eventually be asking, “Jack who?”. Now, I don’t pretend to know a lot about golf - but I do know a little about managing assets. When I am assessing a Portfolio Manager, I use one of the world’s largest pension/insti tutional consultants to help me pick only from the top 15% in the world. This company is independent and has no biases in hiring specific managers or firms. They only provide research and monitoring for me."
In my opinion if Tiger were a PM (Portfolio Manager) for a pension, institution or high net worth family; he would have been let go long before now.Here are four reasons:
1. Staff change. My consultant meets with money management firms to identify two or three individuals whom they believe are key to the success of the investment process. These individuals are
clearly identified on the company’s profile. When Tiger Woods’ father passed away, one of the individuals that was key to Tiger’s success was no longer part of the team...FIRED!
2. Process Change Tiger seems to constantly change his swing. All I hear is “Tiger’s got a new swing, Tiger’s got a new swing”. My consultants are encouraged when they ask managers why they do something in their process a certain way and they tell us they have learned through experience. Wholesale changes like a value manager buying growth stocks, can lead to a manager being FIRED!
3. Compliance/ Operations I won’t dwell on this but the sense of discipline that Tiger possessed before his father passed away seemed to be lacking when he was suddenly a tabloid favourite...FIRED!
4. Performance I don’t follow the stats on this but I believe he has missed more cuts in recent years. Performance, I believe, is a derivative of philosophy, process and people. I do not usually fire a
PM based solely on performance.But performance is important and for the 3 reasons listed above...FIRED !
Do you remember Kyle Thompson? That’s okay, neither do I. In 2012, in 561 putting attempts under five feet, Kyle Thompson made 94% of them. Not bad!! Where did that rank him on the PGA tour? Dead last, 191st place.
My success managing financial assets comes down to one thing...my disciplined investment process.
I have a well-defined investment process and an independent (unbiased) world class consultant that has a process to find the top 15% of the universe of portfolio managers in the world.
Do you have a welldefined investment process?
Will you “make the cut”? Is it time for a second opinion?
To read previous articles, visit www.jimengwinnipeg.wordpress.com/