Well, it has been a month since the demise of Finacorp. I don’t know for sure why the company died, but I suspect that it overexpanded, and could not support its larger size.
As for me, I have been mulling over the possibilities and have settled on two main courses of action:
- Setting up my own asset management shop
- Setting up my own consulting business on investment, business, and insurance matters
I have left aside the idea of outside employment for now, whether in the private sector or the government. I have also shelved the idea of writing a book. I am still reluctant to write a newsletter, because of my experiences in writing about individual stocks. I was right more often than I was wrong, but when I was wrong the response from readers was disproportionate.
Asset Management
With asset management, I have a great track record with my own portfolio going back to 8/31/2000, complete with all of the brokerage statements to back it up, and a consistent operating philosophy. I need to get a number of legal matters straightened away before I can start up, though I would consider plugging in to some other firm to provide the infrastructure that I need. If you have an interest in that, let me know. In the early phase, minimum investment amounts will be lower. Not sure on where that will be yet.
I will likely offer my strategy in two forms: long only, and market-neutral. Between the two funds, you can express your own bullishness, while I hopefully continue to outperform the S&P 500.
As it is, I have a few nibbles as far as larger investors go. If any of them hit, that will propel me forward faster.
Consulting
With consulting, I have a few clients already. I call my consulting applying math to complex business and investing problems. As it is, when I worked for Finacorp, many of my projects were consulting for clients, providing tailored research to meet a need.
In the past that has involved:
- Analyzing complex securities to ascertain value, or lack thereof, whether fixed income, equity, or whatever. I am happy as a clam when digging through complex legal documents. (I know, that is perverse.)
- Analyzing portfolios of equities or debts in order to improve performance.
- Being a second opinion on complex investment questions. I can provide the contrary opinion on investments that are moving against you.
- Complex insurance questions. I am a life actuary, and more than able to analyze tough questions there.
The future could involve:
- For small municipalities: do you need someone on your side? I am not able to be fooled by Wall Street investment banks that will pitch you all manner of complex products. I will tell you he truth, and be on your side in complex negotiations.
- The same applies to DB plans and endowments. Is your consultant giving you a bum steer? Are you wondering if you should fire him? I can help with that.
- And more. I have many skills with data mining, setting compensation schedules for salesmen, and other complex business questions.
- But most controversial: you can hire me on the question of whether you need a consultant or not. Most of the time, the answer is no, unless you have a small staff with no experience in the area in question. Most of the consultants that I dealt with in corporate America were less competent than the middle management of the firms engaging the consultants. Would that managements would trust their middle managers.
Look, I shoot straight. If I can’t solve a business problem, I will refuse it. If I try and find I cannot get to a solution, I will not take payment. My rule is that I don’t get paid until my client is happy with my work. I never want to live with negative word of mouth; I want a bevy of clients very happy with my consulting work. That fits with my work attitude, because I look for the success of my clients first.
That is what I am up to. I am open to other ideas, feel free to e-mail me. Please understand that I get a flood of e-mail everyday. I read it all, but I can’t respond to all of it.
Thanks to all of my readers. You make my blog better.
Sincerely,
David
