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To: Knighty Tin who wrote (201847)	11/3/2002 3:58:49 PM
From: Knighty Tin	Respond to of 436258

Wall Street Week with Fortune. A very funny show this week, though I saw the rerun version today. Had to watch Evilliard on Louis Everbull's CNBC show on Friday. By far the funniest was Chuckie Schwab. How stupid does he think his clients are? Well, probably better not to answer that question. <g> Anyway, he talked about his unbiased money managers and left out a few points: 1. He is coming very late to this party. The top 5 brokerage firms have nailed down exclusive agreements with the major money managers. That leaves him lousy performers with a big name. For example, U.S. Trust, which he mentioned on the show. Geez, this co. is indexing at high fees. 2. "Our outside managers have no bias." Neither do the outside money managers at the other firms. In both cases, so what? They also have no talent. Buy Worldcom and ride it to 1, where you discover irregularities and sell the stock, that's the ticket. 3. "Our outside managers are independent. Of course, they have to do all their trades with us." What a pregnant comment. First, you are charging the client a pretty penny to get "independence," then guaranteeing a kickback from this independent entity. Otherwise known as double-dipping. Do your traders offer the best trade for the managers? Not if they have half a brain. The traders will take no risk for zero chance of gain. You'll buy at offer and sell at bid, every time. And heaven help you if you have to trade size. Nasdaq and bond trades? Fuhgetaboutit! If CS First Boston has the book on a Nasdaq stock (assuming that their likely bankruptcy hasn't cut back their activity), what are the odds they'll take risk to give Chuckie's managers a better price than they give their own managers? Or their paying customers? Oh, and how tough will the "independent" managers be on the commish they pay for you? Oh, yeah, they're going to beat up the firm that sends them so many clients. After I kick Cindy Crawford out of bed. <g> 4. One good point was his criticism of the Wall Street settlements: "behind closed doors with the wrongdoers setting the terms." They had some hedge fund guys, one who was named Hedges. That is similar to Alan Greenspan's nickname being Bubbles. <g> They talked all about hedge funds being for the average joe now without ever mentioning the bizarre expenses and the cloud of secrecy surrounding them or the covenants that allow them to keep your money in house for many months after you've decided to dump them. Don't get me wrong. I managed a hedge fund and like them. But you have to point out that Robert Redford freckles too much and has a lot of warts. <g> A show with absolutely no tough questions.