Category Archives: Investment Adviser

Asset Management, Business Articles, Investing, Investment Management, Learn About Investing, Money Manager, Value Investing

7 Lesson’s You Can Use From Investor Guy Spier

What comes to our minds when I mention the name Guy Spier?

Guy Spier is a Value Investor, Fund Manager, Investment Banker, Harvard Graduate, Talented Skier, Father, Husband and also Mr. Spier is a Community leader of VALUE X.

Here are Seven lessons I have learned from Guy Spier that I would like to pass on to you. It doesn’t matter if your a Professional Investment Fund manager or Company Executive. You will find calmness and wisdom from Guy’s wisdom.

Investing Without Emotions

Guy teach’s his followers like myself that we should always invest without emotions. First we must break down what this means. 1. Breaking down what are our personal Behavior Biases truly are? 2. Be aware of common behavioral biases we may resort to without thought. 3. Defining your goals and time horizon can help you avoid emotional biases. 4. Bucketing or Achieving Milestone’s helps your clearly see your progression. Discipline can help you keep to a plan of action.

You may feel that watching CNBC or Bloomberg as a Retail Investor is good to gather the latest information on the market. It will feel like this gives you an investing edge in the market. However your are dead wrong! It’s simply a media outlet meant to deliver news and entertainment in the business world. That’s all. It’s smart not to allow this Television content to cloud your judgment and emotions while Investing. We as Value investor’s have a checklist, and a sophisticated skill set that includes Due Diligence and valuation processes before Investing in a Opportunity. We use these skills and our personal research before deciding if this would a good investment opportunity. Having the discipline to say no to things or investments does have tremendous value. Survival is everything. Protecting Capital is your duty. These are all ways to help you as a individual keep thing in focus and Invest without Emotions.

Resist Rebalancing

Many Retail Investors are being taught by the Traders on Youtube and it’s also standard practice for many Financial Advisors to Rebalance your Portfolio of securities when it looks like the market is overvalued. This looks like this. Your standard Retail investor has twenty securities positions. And if you place Five Percent of your Capital in to twenty positions this equals a hundred percent of your capital. However if history is a teacher? And if you were to just allow your portfolio grow organically? You may have a few positions see substantial growth and you will see a mixed bag of performance of mediocrity. And then you will see a few positions perform poorly earning you no returns or possibly loosing money. However with Guy’s approach of just allowing your portfolio to grow organically without rebalancing? You will see your small set of high performers account for most of your growth in your portfolio. While at the same time limiting the loss’s of the poor performers. In other words? Investing is very forgiving if you adhere to using long term time horizons as a strategy for your portfolio.

Learning From Your Mistakes Early in Your Career

This is truly a important lesson that Mr. Spier has shared publicly that I feel has a ton of merit for other Investors and Entrepreneurs like myself. Bottom line up front? You will make mistakes. You will make many mistakes. You will embarrass yourself. Making Mistakes and learning from them is just apart of the Human Experience. And if your a Entrepreneur? You will likely find that your failing your way forward. Now let’s learn about a big Mistake most Investors encounter when they begin investing as Retail Investors. You just don’t know what you don’t know. There are three different types of Entrepreneurs. Small Business Boutique Entrepreneurs, Enterprise Operator Entrepreneurs, and the Decentralized Investment Entrepreneurs. All has their own unique world. However they all encounter one mistake after another. It’s truly important to share your mistakes so that others may learn from your mistakes in business. Let’s be honest! Sometimes they make for great stories when your successful in the end. LOL

Defining Your Circle of Competence

Defining your circle of Competence means “What are you trained to do and what are you professionally knowledgeable about?” This important question can give you direction and confidence when evaluating Investment Opportunities. And if we are being honest if you can fix your Car’s Engine when it fails on you. I wouldn’t expect to see Guy Spier turning wrench’s in his Driveway in Switzerland when his car suddenly has a failure. No He would dispatch a Automotive technician or just buy a new car. Why spend the time on something of this caliber when you have options. Expert Networks operate in the same manner. There are Business professionals who do not have backgrounds in all things related to technology, manufacturing and and so many more topics of interest.

GLG Insights is a company any Investor or Business Professional can access and speak to Experts in their respective fields about a topic and answer difficult questions you may have about their respective professions and expertise. If you don’t have a Background in Softdrink manufacturing it’s likely you would seek out Softdrink Manufacturing experts. This is what we mean by saying, “Define your circle of competence.” You know what you know. And leave the hard questions to the experts of their fields.

Risk and Downside

Investing is a activity that involves Risk. Risk is the thing that acts as barrier or is the Downside of Investments. Some investments are relatively safe like Investing in US Treasuries. Then their are Investments like for example investing in to High Risk opportunities that may not return your capital and may not give you a return like New Startups and Junk Bonds. It all comes down to What is your Risk threshold. The lesson we can take from Guy’s lesson’s on Risk directly is communicated by his friend Warren Buffett. Warren spends a lot of time thinking about the Downside of an Investment. If you are comfortable investing your money into a company with a proven track record? Then it’s highly likely the downside of risk will be lower than investing into a unproven company that has not been in business for long. Your appetite for Risk is a personal comfort level. And I must mention that your comfort with risk directly correlates with what your circle of competence is!

Interestingly Mr. Guy Spier’s father was a Sapper in the Israeli Army. And the reverence and love that he speaks about his Father and how his Father is able to calm the environment with his presence and ability to listen while bringing calmness to the situation. Sounds to me like the Man you want next to you in a Fox Hole while your being bombarded with Bombs and all out War. This touches on the Topic of Risk and Downside because you want to be able to keep your cool during stressful situations. Id love to learn more about Mr. Spier’s Father. He sounds like a real Bad Ass. I can respect that.

Did you catch my latest Article on Bill Ackman’s Investing Principles Here.

Courageous Integrity

While watching or rather Listening to Guy Spier and his fellow writer Mr. William Green it was very refreshing to hear these two community leaders speak about having the Courage to share your thoughts and feelings in real time. While filming a episode of the Podcast Surviving and Thriving recently. They were sharing a point in time when they were collaborating and writing Guy’s first Hit Book “The Education of a Value Investor”. I found it utterly Courageous that Mr. William Green had the fortitude to hone in and selectively ask hard questions and seek difficult answers to personal situations that occurred to Mr. Spier during the very stressful weekend of the Great Financial Crisis of 2008. The Video is below. Furthermore during the weekend of the Great Financial Crisis Guy’s Aquamarine Fund was hanging in the balance and held hostage during the Bankruptcy of Bear Stearns. However Jamie Dimon and JP Morgan came to his Funds rescue by making a Bid and buying Bear Stearns. It’s truly a fascinating look at how two very good friends of 30 years can open eachother up and allow mutual trust. A lesson definitely worth the watch.

Keep a Professional Journal | Annual Reports

William Green and Mr. Guy Spier touch on the very important topic of keeping and committing to writing a Professional Personal Journal or even servicing your Funds Annual Reports. Some in our space of Investing, do diligently keep Annual Reports detailing their Thoughts, Decisions, and the reasoning behind the exposures in the Market within their Portfolio’s. How many times have we as individuals forgotten why we did this or that or forgotten our split of the moment thoughts and reasoning while explaining our actions to others who were not present? Keeping track of professional actions is vital to our success as Professionals. So understandably It makes since to keep a journal. However it’s also important to keep a Personal Journal to allow the reader or you back into your Decision making process. We are all humans. We are all imperfect. So keeping a Personal and Professional Journal can make a ton of sense for Professionals like myself and Guy who do openly and admittedly have ADHD.

Mr. William Green’s advocacy of writing throughout your career stems from his professional life as a Author and writer. He is always selflessly adding value in the Investment Space. Mr. Green is a professional writer within the Value Investor community. And his speech’s and guidance and journal suggestions are always pure gold. I genuinely appreciate Mr. Green sharing thoughts publicly as it has helped me in my writing.

Annual Reports

Why keep a Journal for a Annual Report? As Professional Investment Advisors and Investment Fund Managers or Partnerships it’s not only smart to keep a Annual Report, but also it’s required by Securities Regulators. When Investors read your Annual Reports it’s wise to let them in to see how your decisions and actions led to you choosing to build a Professional Portfolio.

After all the Investment Returns or Failures need to be accounted for. An annual report is a document that public corporations must provide annually to shareholders that describes their operations and financial conditions. At the end of the year when Annual Reports are drafted and published this keeps all involved in the Profession Accountable and demonstrates Public Transparency. I hope you found something in this post useful and insightful from Mr. Spier’s content.

Godspeed
JS

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Accounting, Business Articles, Financial Adviser

X-Spaces Three Financial Statements Chat

Recording From Today’s X-Spaces Chat HERE.

As Promised, Sharing the Content I was reading on the X-Spaces Value Investors Chat from today.

Mary Buffett’s Book

“Warren Buffett’s Interpretation of Financial Statements”

Compouding Quality’s Infogram VISIT HIM HERE ON X

Wall Street Oasis “Three Financial Statements Cheat Sheet” VISIT & CREDIT WSO

What did Mary Buffett Give Warren Buffett for Christmas several Years Ago? Read about it Here & below.

If you did not read my last post on the Three Financial Statements and Accounting Visit HERE!

Thank you for joining me today, I hope those who find this content learn something. That is my goal.

JS

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Asset Management, Business Articles, Endowments, FUNDS, Trusts

Endowment Fund Basics

A Endowment is a Legal Trust Structure for the purpose of creating a FUND that raises donations for continuing the mission and operations of Non-Profit Organizations such as Hospitals, University’s, Museums.

What are the Three Types of Endowments

When your Non-Profit organization is considering using the Endowment structure? It’s appropriate to have your team of Investment Advisers, Accountants, and Attorneys work together to discuss the type of structure or type of Endowment Structure is appropriate for your Organizations needs. Here are the three types of Endowment Structures and how they are used. According to the Financial Accounting Standards Board (FASB) these are the details of the three types of Endowments.

Term Endowments

    A Term Endowment is not perpetual, it is organized and funded for a specific time period. This can be years or until a specific end date that is specified on the Endowments Documents. Term Endowments can begin often when a Death of a Donor takes place or when a Document states. After period of time or expiration the total amount can be used to begin funding Operations.

    True Endownments

    A True Endowment begins by the Donor providing FUNDS to the Endowment and specifying the Funds are to be kept in perpetuity. A written agreement is used to facilitate the Funding and future use of Income of True Endowments.

    Quasi-Endowments

    The Board of Directors of Endowment Funds vote on the best use and deployment of funds with their Advisers. This includes electing to use Reserve Funds, making unrestricted Gifts to other Organizations, and deploying new funds from a unforseen donation. Inclusion is at the Discretion of the Board of Directors of a Endowment. This means the Board can elect if the new funds can be placed into a new fund or included into a outside Quasi Endownment Fund.

    Endowment Management

    Fund Managers of Endowment Funds and Non-Profit Boards of Directors work very closely with each-other to ensure the Endowments Investment Objectives are being met and kept. The Endowment Fund manger is professionally duty bound and a Fiduciary. The deployment of Funds by Investment management will work to allocate into appropriate Investment Assets. Keeping to the Endowments Investment Objectives and Policies.

    Endowment Funding

    Endowments are funded mainly by relying on public donations. A “PRINCIPAL” amount Donated is invested into Income producing Assets which may include Bonds, Equity Stocks, and other Appreciating Assets. And later the income from these assets are used for Operations and other uses as stipulated by the Trust Documents and at the Discretion of the Board of Directors.

    Some Disadvantages of using the Endowment include: Some donations can only be used for limited purposes. There also maybe some limitations or restrictions in the Endowment Trust Docs that prevent funds from being withdrawn or used for operations. That depends on the Fund Covenants.

    Advantages of using Endowment Funds? Funding a Endowment Trust can lead to Non-Profits being able to fund a mission and it’s operations. Not to mention being able to invest donations for the purpose of funding programs that help and improve communities or causes.

    Did you catch my Article on “The Ultimate Guide To Trusts”click here.

    Largest Non Profit Endowments from the year 2021

    The National Center For Education Statistics lists the largest Endowment Trust Funds below, and HERE.

    In Conclusion I hope you learned some basics about Why and How Non-Profit Organizations use Endowments for their Organizations needs. This post is meant to communicate the uses, and what are Endowments for public educational purposes only. Thank you for reading.

    JS

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    Business Articles, Investing, Investment Adviser, Investment Adviser Arizona, Investment Adviser Kansas City, Investment Adviser Representative, Investment Vehicles, Money Manager, Venture Capital

    Why VC Firms Are Turning To Investment Advisers?

    VC and other Partnerships have a big problem. Some are not evolving with the changing Financial Landscape.

    Many Venture Capital Funds and Private Partnerships are literally risking their capital to risk. It’s not difficult to observe the Capital they have worked tirelessly to raise is diminishing from sitting for long periods. It’s also apparent from the current VC Partnerships without a Investment Adviser the accounts they keep their funds in do nothing to serve the developing Risks. Which in return silently and maliciously erodes the Funds Purchasing Power and additionally? Diminishing the capital. Discounting continuity and Preservation of Principle. Investment Advisers know how to minimize risk, strategically Preserving Capital, while at the same time implementing Growth of Funds. The bottom line is this! Not evolving to the changing ecosystem. Will diminish your Partnership Performance and diminish your returns and capital performance for your clients.

    Exemption for Venture Capital Funds for Investment Advisers

    Currently the Investment Advisers Act of 1940 has an Exemption for SEC or State Registered Investment Advisers who manage Private and or Venture Capital Funds. This is a Gift to the VC Partnership and Private Fund world. However based on my experience and research only the serious Professionally managed Firms are quietly utilizing Investment Advisers skills to help manage their VC Funds. After reading a Post on Medium about this Topic. It seemed prudent for me to give my Professional opinion as a new Investment Advisor Representative. You can read the article the Attorney who wrote about Compliance of RIA’s turned Venture Captial Firms “HERE“.

    Market Conditions Always Changing

    The SEC is very strict in it’s Regulations, and the Finance Laws are extremely complex in the Investment Adviser money management world. However the Laws and Regulations can be used for good. Especially for PROFIT AND FUND GROWTH. If you have a small team of Advisors and Attorneys who are experienced and trained in how to use their skills to navigate the complex Regulations and laws for the Benefit of your Partnerships Fund. Your ahead of the Curve of Diminishing Funds. Making your Clients capital grow and keeping your Clients Happy with your Fund or Partnerships performance. There is one certainty in Business. That is “THINGS ARE CERTAIN TO CHANGE! EVLOVE OR DIE.”

    Founders Fund Registered Investment Adviser?

    Peter Thiel Founders Fund is now a Registered Investment Adviser. (Image BELOW)

    Which recognizable VC Firms are Investment Advisers Currently? Sequoia Capital registered recently as a Registered Investment Adviser to begin investing in the Capital Markets and Crypto Assets. Andreessen Horowitz is another Venture Capital Fund that recently registered as an Investment Adviser. This list is growing. And it seems more and more VC Firms who are serious in the space are turning to Investment Advisers for their Funds. It’s likely they have so much money under management they need to distinguish themselves and account for risk vs. returns to add a layer of Preservation of Capital. It also must be shared it’s just good business acumen to have a Money Manager who can give peace of mind to the Fund Manager and Client’s personal Asset Allocators.

    If you stop to fully read the SEC.Gov website on Exemptions for Advisers to Venture Capital Funds (BELOW). You will likely conclude this is certainly the future of VC Funds who are leaders in the VC Space. Having a Professional manage your Firms Funds is added security. The benefits far outweigh any downsides. When your thinking strategically as a Investment Committee. Recently a College PH.D Finance Professor shared with me at Arizona State University, “He feels the future of Investment Advisers will begin to morph into a fragmented space where VC funds become Powerhouse VC Investment Adviser Run groups.” I honestly can see myself it’s likely to expand into other Partnership Funds as well. Interestingly this is already taking place.

    Did you know..? “It is against the Professional Standards and Regulations of the Uniform Securities Act and Investment Advisers Act of 1940 for any Investment Adviser Representatives to make guarantee’s or promises related returns.”

    Venture Capital Firms Turning Into Investment Advisers

    Traditionally many Private Funds or Venture Captial Funds have used a REG D offering for their Funds framework. However based on evidence in the space and growing sums of Capital under management? Times are changing and VC Firms are turning to or into Investment Advisers. To leverage Capital Markets for Preservation of Capital and Growth.

    A Reg D offering and a (RIA) Registered Investment Adviser are completely two different things. A RIA is a Firm that Manages Funds for a percentage of Assets Under Management. Usually 1.5percent. A REG D offering is a “Exempt Offering”. The Law and Regulations all RIA’s Registered Investment Advisers have to adhere to professionally. Includes a long list of seriously strict responsibilities, Regulations and Policies. It’s serious business. Some of the rules of the road address Portfolio Management, Custody, Investment Discretion, Record keeping and lots lots more. However this is not a Post about Laws, Regulations or the differences of a REG D offering vs. a Registered Investment Adviser. This is meant to share more in depth examples of the complexity of Managing Funds.

    Venture Capital Teams Under Pressure to Evolve From Competition

    With many Venture Capital Firms under pressure to out perform each other and evolve from their competition by performing with their Clients Money. These Venture Capital Funds are feeling the squeeze of having Capital sit for long periods inside accounts without proper preservation policies implemented. This causes the Capital to be inactive on the Firms Balance Sheet. There are strategies Investment Advisers can execute to minimize Purchasing Power Risk and begin to grow Funds implementing a preservation of capital as it’s Objective. Several large VC Firms have seen the Value Investment Advisers bring to the Balance Sheet using Advisers. And more and more Venture Capital firms are on the look out to Recruit Investment Adviser Representatives for their Skills. One thing is certain in this Asset management Business. You should always be looking to gain the edge by utilizing Investment Advisers Skills to help grow the Firms Funds.

    Conclusion Clients Impressed By Increased Returns

    In conclusion after sharing the above examples. It looks to be completely clear the Venture Capital space is turning to Investment Adviser Representatives and utilizing their money management skills. It’s absolutely clear the Value and increased performance Advisers can bring to a VC Firm and their Investment committee. Traditionally speaking? Investment Advisers do 3 things incredibly well. Preserve Capital, Manage Capital while managing risk, and strategically use Capital Markets to Grow funds, for the purpose of beefing up a Company’s Balance Sheet.

    Have you read my post on the Three Financial Statements “HERE“.

    Risk will always be apart of Professional Investing at every stage. However many Investment Committee’s and Investment Professionals would most likely agree. “Having a Professional Money Manager on your Firms Team will likely give your Company an Edge in the Market while making your Clients very happy from seeing a improvement ROIC.”

    Thank you for reading.

    JS

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    Asset Management, Business Articles, Financial Adviser, Investment Adviser, Investment Adviser Arizona, Investment Adviser Kansas City, Investment Adviser Representative, Money Manager

    News: Series 65 Law Exam Investment Adviser

    Professional Investment Adviser Representative Law Exam “PASS”

    After studying and taking on the challenges that lasted for nearly 2 years. Monday March 11th 2024 I passed my Professional Series 65 Uniform Investment Adviser Representative Law Exam.

    Passing this difficult professional exam allows me to register with a State Securities Administrator as a Licensed Investment Adviser Representative, through a Federal Registered Covered Investment Adviser or State Investment Adviser. Investment Advisers are hired as Fiduciary’s to give Institutions and Individuals Investment Advice, and are also able to Manage large pools of money inside Investment Funds. To read FINRA’s description of what this Exam does for a Professional Money Manager click this link, HERE.

    Investment Adviser Examples: Some give Investment and Securities advice to Corporations, Institutions, Boards of Directors, Individuals planning for Retirement, work as Hedge Fund Managers, Pension Consultants, Sports & Entertainment Management, Asset Managers, Wall Street Private Bankers, and also High Net-Worth Wealth Advisors. It’s a serious Profession. That comes with serious responsibilities. Investment Advisers are considered Fiduciary’s.

    This is a Huge Victory for me professionally. And it’s only fair that I Thank the people who helped push me to achieve this life long professional goal. The list of people who have helped prepare me to pass this difficult exam is small. As soon as I left the exam office I took some time and shared the special news firstly with my Dad. To the others who did help me? You know who you are and I am whole heartedly eternally grateful for your confidence and trusting in me to perform.

    Cheers to you all. I am very excited of what’s is to come next on my journey.

    The mission continues.

    JS

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