Hey all! Don asked me this a day or so ago and since he did so as well on the Trading Desk thread, I thought I would just copy the post here, the usual stuff. Sorry if it is long I just didn't want a one sided story.
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Don, since you ask, I will answer you....(you had posted this on the Fronteir thread so I will post it there as well since you seem so interested), as well, I will give you my overall 'approach' so you can , << better understand my thinking>>. I apologize if it is quite long, but I thought that would be the best way for you to truly understand who I am, what i do, how long I have been doing it and my approach to the financial markets.
I am 29 years old and have been investing actively for probably 16 of those years. I was investing when I was in elementary school witha drip plan in GE because everyone I know had a GE range top oven. While other students were writing book reports on World War II, I was writing reports on the effect of World War II on the stock market and the ressurgence of the US as the world's industrial powerhouse. As a teenager, I used to spend my summers workin in a brokerage firm, running tickets for the brokers and traders, checking the blotters. I helped the firm I work for develop their first computer order tracking software. I have always been a techie.
The most fun I would have during those young days would be the chance to get down onto the floor of the NYSE. I would stand about 4 feet from the specialists in the big stocks and watch the wheeling and dealing that was going on. Those floor brokers were wheeling and dealing but it seemed like awfully physical work that could have been done better through computers. PCs were barely laughableat the time. Now we have superdot.
The whole while investing any money I was earning. As a highschooler, a few well known tech companies gave me a networth of about 80,000 bucks, a ridiculous sum for a wide-eye teen.
More recently, I have been working in the financial industry for approximately the last 6 or 7 years, depending on the capacity we are talking about, including as a pure "broker", a broker's assistant, a trader's assistant etc. The typical course/paths one would take through the financial industry. Bernard Yamner, who has worked on Wall Street for over 25 years, sits about six feet from me and is the best mentor someone could ever have. He is the most talented trader and probably one of the most honorable people I know.
During the past two years, I have been head trader at the firm and pretty much manage the firm, day to day. I am a sales, options and financial principal. I handle our institutional accounts, managed accounts as well as enjoy strong relationships with many, many of our clients. The Trust Co. Of NJ, a multibillion dollar NJ bank and the Bank of NY, are two great customers of ours, in addition to 800 to 1000 other clients. Mr. Siggi Wilzig, the President, CEO and Chariman of the Board of the Trust Company is someone I speak to on a regular basis, about twice a week and would be glad to verify my statements.
We handle everything from the active trader to the tradiitonal buy and hold/long term client to those who simply should be in fixed income. We have a 'managed' money group and your traditional brokerage account/client 'directed'. We are a small regional firm. We have, though, been around for over 20 years, the whole while losing less than 1% of our clients. We are adifferent kind of firm, not what you are probably used to. We develop strong relationships with our clients and only make a recommendation, suggestions, etc. when it is in their best interests. We are a discount firm but don't do trades for $9. You get what you pay for.
My particular investment orientation is relatively conservative. Nonethless, as a result of a strong economy, I am a very cautious bull. I believe that the US is dominant in two areas, technology and healthcare technologies. As long as we maintain dominance in these areas, our leading companies should continue to prosper. Many foreign countries have volume product but noone has the technological infrastructure or intellect that the US has.
Nonetheless, given the tragedies I regularly see in the market as a trader, (the oxford healths, the centennial technologies) I am very, very cautious when recommending or presenting ideas to clients.
When you hear and read about what they did to xyz because they only made 35 cents instead of 39, it gets scary. I am usually twice as conservative with most investors money than I am my own. It is one thing to invest in xyz for yourself, knowing full well the downside risk and to actually realize that downside risk, it is quite another to have someone come to you with their hard earned money, ask you what is best and be frivolous with your recommendations. Generally when someone asks about xyz company, I try to play devils' advocate. If in doing so, the clients still wants it, great. I would be glad to give it my best efforts and geta great exectuion, but atleast we put it through its paces. Doing so, I have definately missed many moves in many of the highfliers, but thats fine, we have done just fine with a much smaller beta and alpha.
I am a firm believer of strategy, courses of action, and utilizing marke data and market components to enhance portfolios. I usually enter investments fully appreciating the downside more than I do the upside. I like to set sell targets and downside stops, when appropriate. Investments opportunities for me must have a risk/reward ratio that meets standards. For growth companies, for example, for a young investor, a three to one risk reward is appropriate. For example, CS is a good investment if it has the same change of falling 10% as appreciating 30%. Ge would be different, etc. An older investor would need to be adjusted accordlingly.
I am under the personal belief that investing like most professions is not rocket science. It requires smart, hard working, sincere effort. Recommending good companies like Warner Lambert, GE, Lucent, etc. isn't tough. Recommending Mercury Finance and claiming it will turn around is simply foolish. Being a broker mean syou care about your clients intuitively and don't think about your profit or commission in making a recommendation or course of action. Buy lists/ sell lists, code calling. They are all garbage. I have chosen to spread my firm's name and do what I can to some extent through this thread, etc. Doing so is respectful and provides valuable info for many readers.
Its no different than any other business. Your clients are your business. Not only have you done well for them, but they do well for you. My clients have provided the great things I have acquired in life and I take a deep sence of responsibility from that. You don't breach that kind of trust. Sure, you can suggest WDC at 23 and 24 as I did and see it go to 18 on you, that stinks. Worst call of the year for me, to date. But the recommendation, when made to the particular party, was a good one made in the client's best interest, not because we have inventory in the thing or make a market it in. The stock will this that the other thing, and the client is this old and has this level of risk tolerance, etc. etc. etc.
I know many of you took issue with my statement about mutual funds, but I like them. They in force disipline in many investors and provide management of some percentage of your account ( if it is large enough) that you could not otherwise prudcent manage, research monitor and execute on your own. For my own account, mutual funds simply complement my trading activities and makes sure the balance of my funds which are impossible for me to actively work, since I am busy with clients, the business, gets taken care of.
Most know my negative feelings about MOST online firms, especially for the trader, the person doing 5 to ten tickets a week. Lack of price improvementss, order protection, routing to market makers who trade against you etc. I don't really need to get into it and be negative because I think some of them are well run companies that are very well suited for many. Nonetheless, I think they do a core disservice in routing orders or making markets WITHOUT fully explaining this to their clients.
BY THE WAY, there is a somewhat interesting article about online trading firms in Businessweek.
I don't consider myself in anyway a Wall Street stereotypical shark. Sure, i work hard and try to bring in business. But we do so honestly and always with great respect to the clients true needs etc. Our firm has been around for over 20 years, not one single claim, filing or other event by the NASD and SEC.
We have done just fine. Clients who have been with us for 20 years as well as any many from this thread who have contacted us or are doing business with us, will verify that.
So, there you go, Don, that's who I am, what I do, how long I have been doing it and my thinking....Hopefully you will now understand where I come from. I put my name and my firm behind everything I say and post. You can call me anytime.
Regards,
Steve@yamner.com |
