New Kid/Old Kid on the Block (Tom Bradley / Steadyhand)

[augustabound]

LOL, fair enough.

I liked your guest post on Brad's blog, part of the reason I asked.

[uhoh]

LOL, fair enough.

I liked your guest post on Brad's blog, part of the reason I asked.

oooohhhh !! send the link

I'm one of scomac's fans and didn't know about it!

[augustabound]

Sure thing. I'm sure Brad and Scott wouldn't object.

http://nurseb911.blogspot.com/2007/11/i ... al-on.html

[brad911]

I had wondered early today why statcounter exploded the past 2 days Augustbound

Great find btw George$, thanks for sharing. Always nice to see that there is another BRADLEY out there willing to share views & perspectives that align to sensible thoughts on investing and the market in general.

[JaydoubleU]

I especially enjoyed this Bradley article:

http://blog.steadyhand.com/globe_articl ... tem=682684

And if there's any truth to it, then we should all be really excited about the current market turmoil, for it represents a terrific buying opportunity.

[George$]

This morning's G&M article from Tom Bradley
The increasing complexity - and masked risks - of wealth management
a bit ...

But in any investment structure, the majority of the extra return, if there is any, belongs to the buyer who is taking the risk.

In too many products today, this is not the case. The current generation of structured products have little or no transparency and, as a result, they mask the risks being taken and how the potential rewards are being apportioned.

[George$]

From the Globe Investor magazine insert yesterday
Steadyhand Diaries by Tom Bradley
a bit ...

February 21, 2008
PH&N announced it is selling out to Royal Bank. Our blog says it all--"Holy shit!"

It's a sad day. I hate to see a great Vancouver firm get absorbed into Canada's biggest bank. PH&N will be indistinguishable in a year or two.

I never wanted this to happen.

But the deal makes us more unique, which is good...I think. And maybe the bank will bring attention to our small segment of the market.

As we head toward the end of our first year, we're managing $30 million for 300 clients. With weak markets and just a one-year track record, we've got to keep our expectations in check. Only a small portion of our target clientele will invest right now. The early adopters either know us personally or were keen enough to look at our managers' long-term performance.

So far, it's playing out as we'd hoped. We've got a great team and set of managers. We've been able to separate our approach and investment philosophy from the herd. And our early clients are passionate about Steadyhand. Who knows? Perhaps we have a chance to be the "next" great independent Canadian firm.

and unfortunately ..

June 7, 2007
...... But TD Waterhouse also called to say they wouldn't be listing our funds. Apparently we're too small and we cause them too many operational problems. Translation: You need a trailer fee.

The TD news is a blow. We may be direct-to-client, but our business model still assumes that 25% to 30% of our clients' assets will be held through other dealers, mostly discount brokers. TD is the leader in that category. Fortunately, most of the other banks and dealers are signing on. In the meantime, we don't want to pay a trailer to a discount broker. An ongoing advice charge for no advice doesn't make sense.

[Bylo Selhi]

From the Globe Investor magazine insert yesterday
Steadyhand Diaries by Tom Bradley

And from today's G&M, Inside the mutual fund industry.

In yesterday's piece Bradley seemed to be against indexing. In today's interview he seems a bit more conciliatory, e.g.

My advice to you would be to simplify what you and your kids are doing. Investing doesn't have to be that complicated. If you're confused by what you're being offered and dissatisfied, I'd focus on a few low-fee funds and ETFs . . . beween 4 and 6 in total.

and

we don't offer a large cap U.S. fund . . . I think a low-cost ETF is a better option.

[brad911]

I liked your guest post on Brad's blog...

He's not the only one who's now famous. Seems Reuters liked your commentary

[George$]

Some more good practical common sense from Tom Bradley in this morning's Globe and Mail ...
'It will sell': A tipoff for bad investment products
A bit ....

As the wealth management industry works through this bear market, investment products that promise certainty and limited downside risk are going to be popular. With guaranteed investment certificates (GICs) offering minuscule yields, stock-market-related products with "guaranteed income" and "principal-protection" will be big sellers.

I think that's unfortunate for two reasons. First, we're now in a favourable environment to take more risk, not less. And second, investors give up a lot of return for the fancy features they're buying. Such things as downside protection, tax deferral or arbitrage and convenience come with a price.

My purpose here is to illuminate some of the tradeoffs investors make when they go beyond plain vanilla.

But first some background. I developed an aversion to complex investment products and packaging about 10 years ago. I was at Phillips Hager & North at the time and we had a number of investment bankers come through our offices pitching us on their newest creations. They wanted to work with us because we had a good brand name that would lend credibility to the products. At the sessions I attended, I always asked the same question: "Is this good for the client?" I never once was told that it was. There was some diverting of eye contact, hemming and hawing, and on a couple of occasions, the answer was simply: "It will sell."

[scomac]

Some more good practical common sense from Tom Bradley in this morning's Globe and Mail ...
'It will sell': A tipoff for bad investment products

This may go down as one of the greatest quotes ever for describing structured finance products:

I liken structured products to Viagra. The industry is hooked on them because they stimulate sales. They're a specialty product that should be used by few, but are sold to many. And the buyers get instant gratification, but pay for it in the long run.

[Bylo Selhi]

I liken structured products to Viagra. The industry is hooked on them because they stimulate sales. They're a specialty product that should be used by few, but are sold to many. And the buyers get instant gratification, but pay for it in the long run.

Punning aside (I'm trying to be serious here), for what (or how) do Viagra users "pay for it in the long run", i.e. what's the, um, downside?

P.S. As for "instant gratification" I thought it took at least an hour for Viagra to do its thing (to your thing, i.e. to get up to speed...)

[Taggart]

Some more good practical common sense from Tom Bradley in this morning's Globe and Mail ...
'It will sell': A tipoff for bad investment products
A bit ....

As the wealth management industry works through this bear market, investment products that promise certainty and limited downside risk are going to be popular. With guaranteed investment certificates (GICs) offering minuscule yields, stock-market-related products with "guaranteed income" and "principal-protection" will be big sellers.

I think that's unfortunate for two reasons. First, we're now in a favourable environment to take more risk, not less. And second, investors give up a lot of return for the fancy features they're buying. Such things as downside protection, tax deferral or arbitrage and convenience come with a price.

My purpose here is to illuminate some of the tradeoffs investors make when they go beyond plain vanilla.

But first some background. I developed an aversion to complex investment products and packaging about 10 years ago. I was at Phillips Hager & North at the time and we had a number of investment bankers come through our offices pitching us on their newest creations. They wanted to work with us because we had a good brand name that would lend credibility to the products. At the sessions I attended, I always asked the same question: "Is this good for the client?" I never once was told that it was. There was some diverting of eye contact, hemming and hawing, and on a couple of occasions, the answer was simply: "It will sell."

Yes, I agree George, probably one of the best articles I've read recently. Good to see a pro being upfront and telling it like it is as far as what's going on behind the scenes. Too many on Wall St. and Bay St. pumping "what will sell", not what's good for the client. You can see it here from this morning's Toronto Star:

[url=http://www.thestar.com/Business/article/613918]Harold Geller, an Ottawa lawyer, is working on a case involving the sale of Olympus hedge funds.

Last year, TD Waterhouse Canada was fined $2 million by the Investment Industry Regulatory Organization of Canada and BMO Nesbitt Burns was fined $300,000.

Both firms were found to be selling these high-risk products without ensuring investors could handle the risks.

The parent company, Norshield Asset Management, was forced out of business in 2005.[/url]

[Yoder]

I liken structured products to Viagra. The industry is hooked on them because they stimulate sales. They're a specialty product that should be used by few, but are sold to many. And the buyers get instant gratification, but pay for it in the long run.

Punning aside (I'm trying to be serious here), for what (or how) do Viagra users "pay for it in the long run", i.e. what's the, um, downside?

P.S. As for "instant gratification" I thought it took at least an hour for Viagra to do its thing (to your thing, i.e. to get up to speed...)

Not many downsides really for the average person - but if you take any "nitro" drugs (i.e. nitro spray - people with stable angina), then occasionally you may get a sudden drop and blood pressure - occasionally causing death.

Does the analogy work?