In your previous thread, you did mention "I know a person who has vast experience and does not invest in the market at all", so base on this sentence what extra information we can get? Vast experience = vast "Investment" experience!? A person who does not invest at all claims he has vast investment experience? What kind of logic is that?

It might be your old friend could have gone through the investment process that why he is so rich now he does not need to invest anymore, but at least he did invest before so he can claim he has the vast "investment" experience, but even with this kind of further information is not found in the said sentence so I have to make an assumption that your friend have experience of "nerding", not investment.

When we met a stranger who claim he is experienced but he personally does not have any investment record to prove, so to anyone who can think logically that how are we going to trust him? Yes it could be your old friend is a genius and telling the truth, but should we risk our money since we have 50% chance to meet a so-called invest expert although he has no 'investment record'? How about the other 50% chance we dump our money into the sea if we being cheated by a con man?

So you are basically promoting investors to give away their hard earn money to those who can talk cock like Mardof? You want twist the point it's up to you, logic will tell it's not safe to let someone who is not well-proven to manage our hard-earn money.

BTW, working in the investment industry does not mean we can't make any investment "at all", we disclose the investment position to the compliance department or to the investors whom we provide investment advisory service to. Whether we invested RM10K or RM1.5 billion in the market it is still considered as investment, which is better than your version of investment expert who does not invest "at all".

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Added on December 3, 2010, 5:14 pmWhen I met the fellow who claimed he has the CFA cert but with no investment experience because he is afraid of investment risk, I realised that this fellow has no passion in investment, and the only aim he wanted to be a fund manager is because of money.

So how good can he perform and how well the integrity of a money-minded fund manager when he is managing the fund?

This post has been edited by kinwing: Dec 3 2010, 05:14 PM

Not arguing, but just felt the urge to clarify and share, since i've got some xtra time here.

A guy/girl was saying somethin like he knws some body who's a fund manager, but dun invest in stock.
SO i've replied fund manager can divide into stock or bonds/FI, which he might b in bonds, hence he's not experience in stock lor.

2ndly just for summary of Invt Bank dept:

I will exclude the stockbroking and tresury/financial markets/monet markets dept (which is the most $ making dept, and arguably at some IBs support the CF/DCM/IB's salary!!).

Ok, nextlet's talk about a typical straightfwd simple IB structure, which consist of CF (executioner for public equity), DCM (executioner for bonds/FI), IB (marketers for CF and DCM). Then u have ECM oso (who does the selldown of public equity), not sure if i left out any other ,main depts. Private equity? structured finance? etc etc? let's not talk about it. too confusing, even for me.

Now the depts above are sell side.

Fund manager are in fact one of the buy side.

Hence, when we talk about bonds, it's a product that IB, DCM, Fund Manager, etc will look at and analyse. IB/DCm sell, FM buy. If no buyers, IB/DCm ask client issue bond for what? Some body must buy, and give the issuance proceeds to the company mah.
Sounds easy rite?

About quantitative, wat gloomberg was saying is correct, partially tho. Fund managers for bonds besides looking at duration, yields, curves, etc.. they also need to look at qualitative (in fact as much as wat equity fund manager look at as well, when they invest in equity that was executed by the sell side CF guys))
These FI fun mgr nid to assess (i mean their subordinates lar, not literally them lar) the viability of business risk, economic / industry analisis, mgmt's reputation/experiences (most importantly connections), financial statememnts, financial projections,etc -> which they call it technical analysis. For those who say they just see rating agency report enuf lar, i will say can u still trust rating agencies after wat happened to Lehman Bonds?

ok. i'll stop there. hope u guys understand my writing and languiance, typos etc, no time to chk grammer, comprehension, sentence structure, etc. Let the CF guys do that ...hahaha...

Hope u enjoy my simplisistic scenario sharing. just tried summarised a big and more complicated pic.

Aiyo... too much chui sui ing... well, if u guys are IBer, we are bound to me each other sooner or later, but just make sure nobody knows who we are at lowyat, if in the case you are real. Fund manager or whatever, is a job that requires constant monitoring, well, not for those top shots that get the clients but for those analysts. I'm still new, and fresh from the oven, so I wouldn't know who's good or a bad investor, i only see ur fund return.

Personally, I would feel that buying a business would be better than any investment medium out there, be it equity or fixed income, but it's just too expensive, unless we are that good in identifying good businesses that would expand into a successful one, then sell them off.

Experience or not, I'm pretty much sure u'll all agree that we work to earn a living so, in the end of the day, what matters most is whose pocket is heavier, don't u guys agree?

This post has been edited by gloomberg: Dec 4 2010, 09:07 AM

haha..how i agree with u...life is tough!! sighh

Sigh, such emotional response.
Anyway, I think I know whats your problem
It seems you have issues trying to understand a statement, OR actually you just look through sentences, not read them.

Now if you could kindly refer to post #111, you would notice that the posting is split into a few parts. In this case, its 4.
In the 3rd part/paragraph, its written as such......

I think it would be clear enough that as these 2 sentences are together, one would read that I am referring to a fund manager. If he's a fund manager, how is it that he doesnt invest (for the company) at all?

I don't even know why would you bring Mardoff into the picture, and talking about cheating ppl's money. hahaha
So you ask, if we meet a stranger (lets put it as fund manager in case you get confused) that claims he has alot of experience, how do we believe him as he has no personal (I assume you are referring to personal account) record to prove?
Seriously, I don't know how to answer you cause its just too funny the way you think.
Like I said before, do you expect a so called experienced fund manager to go around boasting that he has made TONS OF MONEY on his PERSONAL ACCOUNT so that you would invest with him?

Ok, now on the compliance part. PLEASE SHOW ME (note, I dont edit posts like you do) if I ever said we cant make investments AT ALL? All I said was, there are limitations, right?
Now I dont know what firm you are in cause if you were in a big firm, the firm would have lots of portfolio. And with so many portfolios, there would be lots of stocks in there, yes? and I assume you (acting for your personal front) would also only buy those stocks if they are good, right? (Takkan lah you buy crap stocks for either you or your company managed fund)
Now, at my place, blackout period is 2 weeks so if theres any, read ANY trades at all on that stock by the company, we cant touch them personally for 2 weeks before and after a trade. Taking into account the process of submitting the application, which lets say is another week. That makes it 3 weeks in total to wait before we can trade the stock. then, WHAT IF in this 3 weeks the company trades that stock, you wait another 3 weeks? LOLZ. good for you.

I'm referring to the case that the fellow who personally not invest at all due to investment risk aversion, so how are we going to believe that when he becomes fund manager he would manage our money well? If I'm hiring a fund manager wannabie who personally does not invest at all before, he won't be hired as a fund manager to begin with, then there would no such excuse that the fund's trade restriction to stop him invest personally. I emphasize again, if a person does not investment at all before, he should not be a fund manager to begin with.

If the fellow who does not invest personally due to risk aversion, what makes him to assume he can safeguard the investors' best interest? Why suddenly he feels comfortable to manage other people's money but not his own money? Is it because others' money is not his money, so he can gamble away the other people's money without affecting him? I can say investors sometimes are too kind to those substandrd fund managers as we are selling a call option for their fee performance. So it is kind of head you win tail we lose. Fund managers could even take excessive risks to get themselves compensate with higher return, so if they are lucky enough they gain a huge fees though they only perform with low risk adjusted returns. How about when things gone bust and funds are making losses, those fund managers are not requested to compensate a sen?

Yes, at least I have some performance track record to refer to how good a fund manager could be, I have lesser chance to come across being cheated by pretended-to-be-genuine-fund-managers, whereby there is one doesn't agree because he prefers to give away his money to omeone who drops from the sky with no track record at all, so who has the greater possibilities to loss the money? The answer is obvious.

And IMHO, the trade restriction or so-called blackout period should not be the excuse not to invest personally if one is a long term investor. And now someone try to justify the aysmmetric treatment being rewarded to fund managers without aligning their interests with the investors' return by giving excuses like fund managers are not allowed to trade personally. So invetors be aware!

(Note: I edit the previous posts because I was trying to fix some typo errors. I did not change any content in the previous thread unless you can prove it)

Woohoo! Battle of the bulge. Guys, just let go our egoism and go to KLIMS and see something that will make us feel good.

I just feel that some fund managers don invest themselves due to the trouble involved..It's just not worth the effort..

By managing a fund properly, they can even rake in astronomical figures as I am made to understand that some fund manager's bonus are tied to a percentage of the returns above certain performance index measure.. Managing funds of billions can get him much more than what he can get by investing his own personal millions.. Assuming the fund manager's personal asset of 10 million, 4-5 million may be tied to house 1-2 million to car leaving another 3 million for investing... He might not wanna invest everything in shares and might wanna keep some money for liquidity purposes leaving 1-2 million for shares...Even if he gets a sky high return of 25 percent, this will only mean 500k as compared to his potential bonus of millions..

Furthermore, he had the hassle of complying with so many procedures in order to invest personally. My friend told me his uncle nearly went to jail for conflict of interest and criminal breach of trust as a fund manager due to overlooking some dumb procedures. Furthermore, imagine you had to sell the shares although very promising due to liquidity purposes which your fund bought for their strong fundamentals, what would this signal to the investors?

Btw, if u said that fund manager who don't invest are either incompetent or fraudster; are you implying the same for independent research house and independent securities brokerage firm ? How can you generalised about all fund managers who don invest?

Chill lar everyone.

You know, it just started with some comment sthat ' a person INSPIRING or WANT to be a fund manager, but does not invest into the market himself or herself'

which i think is different from "A fund manager who does not invest on his/her own" <--- current debate.

Anyway, at the very least, don;t you guys agree that a fund manager should at least put some of his/her net worth into the fund he/she manage?

Just my 2 cents

fund manager is not so much on IB if i not mistaken

When we talk about IB we think about underwriting shares, IPOs and corporate advise.


Please correct me if I am wrong.

This post has been edited by mikro: Dec 5 2010, 12:19 AM

jz wana share with those who wana join IB bcoz of wana know 2 get big money from investing o trading of shares, i think lotz ppl have wrong concept on working in IB s i meet & ask lotz of fresh grad b4. yes, mayb u can learn some investment o trading skill if u work in some departments like stockbroking, research, proprietary trading, fund management, institution equities, etc, anyway, you still nid 2 follow the ethics & rules working in IBs, and i believe this is wat ppl said the 'limitation'.(o mayb u can find other alternative)
i started my IB career in equities & futures broking, noe y? bcoz watched too many chinese hong kong dramas last time, especially the 'dai si doi': chao gu piu, chao kei foh, bou chong, zham chong, haha...afta i joined oni i realize that was not exactly the job i wanted, anyway, i've learned lots during my time in equities & futures broking. thx 2 all my sifus.
regarding 2 the fund manager issue, yes, he may not has his own personal investment experience, as long as got company hiring him. but if u ask me whether i am willing 2 invest in his fund, there will be another story. as spoken in the previous posts, due 2 investment risk (if i'm not misunderstood), he nv invest his money in the market, it shows that he is not confident either on the market o himself. if he has no confidence, how ppl feel confident on him? jz like previous post, someone ask ppl buy insurance but himself nv buy any of insurance, haha...i dun think he can outperform the fund he manage, even outperform also can consider s 'lucky'. i still remember my current boss questions when interview me: will you invest in the market if u hv money? what is your investment strategy if i let u 2 manage 100 million fund now?

I have to disagree.
Firstly, like someone put it, it's just not practicle (tho not impossible) for this FM to invest, due to compliance/regulation/legal restrictions, be it those set by SC, BNM and chances are this FM is a member/candidate of CFA, hence CFA code of ethics need to be considered as well. Well of course he/she can use "nominees", but u know wat that means.

2ndly, i personally think professional and personal matters shd be separated. If I interview somebody, and the candidate boatsed that he likes to invest in shares i'll be pretty worried about independance and fair dealings issue. If i get interviewed and being ask that question, i would say i dun invest personally, because i want to devote all my time/skills/knowledge/experience/analysis for the best interest of my clients, and my personal interest is secondary..U may call that BS, but that's a safer choice.

My real worry is i've notice ppl out there and in this forum, thinks FM/IBers in the industry "must" invest shares. I think it's very wrong.
If u buy the same shares as u invest for ur client (for FM) or on the client ur handling (for IBs) that is not independent. Not sure u still rmbr ur ethics "u must maintain ur independance or seen to be independent" . If not why would these "professionals" have to go thru the route of using theirparents/sibling/wife/frens name to invest? If they dun think its wrong why dun jx use their own name, and tell the whole world?

Just my 2 cents as well.

Here we come again. Just for the sake to rebuke my points without thinking logically.

For your information, CFA or SC or BNM or any other authorities do not prohibit fund managers/investment & financial consultants from possessing own portfolios. Please show me any laws/rules/guidelines that prohibit the fund managers/investment & financial consultants should not possess any kind of investment at all.

Having own personal portfolio would not stop the fund managers from being integrity. Or I put this way that if someone claims he has not owned any personal portfolio so he could act integrityly to manage the other people's fund, how sure we know he does not secretly hire a proxy to invest for him and split the profit 50-50? Is this fund-manager-has-no-personal-investment-in-disguise an intergity man? From this point, we should know whether one has portfolio or not would not stop him from being integrity.

Warren Buffet, one of the most intergrity and respected fund managers in the world, has his own personal portfolio other than managing for Berkshire's holding. If anyone think he is more morally higher than Buffet because the one thinks he has no personal portfolio to begin with, then go ahead to troll!

My arguement consist of two points:-
1) If one does not have any investment experience at all because he purposely avoid from engaging any investment activites in order to show his integrity so he could increase the chance of becoming a fund manager, how logic is this statement? How well can we trust the inexperienced manager can deliver a good return?

Imagine a situation of interviewing a fund manager wannabie with no investment experience:-
Hiring Manager: "Do you have your own investment portfolio?"

Fund Manager Wannabie: "Sorry Sir, I don't invest at all because I'm afraid of investment risk."
(Quite obvious that in the real world most fund manager wannabies, won't tell in this way if one does not have the related experience, so basically those wannabies lie in the beginning, so how much integrity he has? OK, now we back to the case that the wannabie tell the truth.)

Hiring Manager: "I don't see the point that when you come for this position but you do not have investment experience at all, then how well you can manage others' people money?"

Fund Manager wannabie: "Sir, I can learn the investment experience from the 1st day I manage the fund (LOL, I would laugh all my way if I was the Hiring Manager). Look, my don't have any personal portfolio so I show my integrity which worth a sen more than the investment experience."

Hiring Manager: "So you want me to pay you with others' people money (the fees paid by the fund) in order to teach you how to invest?"

Fund Manager wannabie: "Yes Sir, I mean that."

Hiring Manager: "...(what a laugh stock!?)..."

IMHO, this fund manager wannabie is either bull shitting or he is too naive!


2) If one inexperienced fund managers manage a fund and luckily he makes good returns and he learns the relevant experience along the way, it is good for everyone. However, we know that garbage in garbage out, so it is more likely an inexperienced fund manager will deliver unsatisfied returns or even losses, and these inexperienced fund managers would not compensate a sen. And a lot of the cases the fund still charge fes base on NAV, not base on performance. It is what I called head you win tail we lose! The investors have already being unfairly treated by paying the asymetric return to the fund, why they should adding more cost and risk to train an inexperienced fund managers whose interest are not align to the benefit of the invetors?


So investors be aware! When ones tell you how integrity they are in order to gain your trust, most probably they are the most corrupted from the interior. I recall a chinese pharase "猪八戒照镜，里外不是人" aka english translate as "When the pigsy looks a mirror, it shows unhuman-like within and without". Apply this phrase in this issue here, when one tells you he is moral and integrity, most likely he is not.

This post has been edited by kinwing: Dec 5 2010, 02:21 PM

Nevertheless, there will be still some independence issues.. I would rather my fund manager invest in the fund which he manages than having a separate portfolio of investments

Btw, i think u meant Warren Buffet invest in berkshire and then he use Berkshire to invests in others and not having a separate investment portfolio.. He almost got nailed the last time he has separate investment vehicles and that is the reason why eh restructured all his investments under Berkshire..

Not to mention Buffet he has concentrated 95% of his personal wealth in Berkshire Hartaway so he aligns his interest with the interest of the shareholders of the said company, he also allocates 5% of his personal wealth in another portfolio. Refer to the link below to check with Buffet's proportion of personal wealth for your attention:-

http://stockmarketadvantage.blogspot.com/2...k-holdings.html

http://moneywatch.bnet.com/retirement-plan...dend-picks/508/

So I'm not sure on what source you get to know Buffet restructed "all" his investments under Berkshire? Btw, I don't really know which incident caused Buffet almost got nailed by having separate investment vehicles, please show any link that related to that incident?

In 1974. SEC began investing Buffett on the charges if manipulating stock price of Wesco and conflict of interest from his investment activities in Berkshire Hathaway.Diversified Retail and Blue Chip Stamps each with different stakeholders It's from a book though, not online

Oya I almost forget the Blue Chips case. It was one of the few cases that Buffet being accused. The other cases are Solomon Brother and AIG. I can't recall the detail of Blue Chips case, need to check it out again before giving any conclusion.

Back to my question that would anyone hire a fund manager who does not have any investment experience at all to manage your fund? As I said, the answer is obvious. It is just up to you to read my opinion and to make your own decision.

I agree with you. But not investing in their own separate portfolio does not equal to no investing experience.

Imagine this scenario, someone who has work his way up from analyst up to fund manager level with sterling performance. However, he do not put aside his money in stock but in property or just use it all... This does not mean he is a lousy fund manager. One does not have to be operated in order to be a good surgeon

Incompatible analogy.

Incomprehensible...