Business Articles, Investing, Investment Philosophy, Learn About Investing

Qualitative Growth Investment Philosophy

This post will share and demonstrate what is written and communicated inside of Phil Fischer Book which is the origin of Qualitative Growth. A investors greatest concern should be managing Risk. If you manage to understand your business and all it’s unique qualities while considering Risk? It’s likely you have stumbled upon the foundation of Qualitative an Growth Investing Principles.

Asking detailed hard questions. Example: When we buy or invest in any company or security? It is only natural to ask detailed educated pointed questions and do some due diligence before we make that investment. And if we add in the fact we are not seeking dividends? That is basically the foundation of Phillip Fisher’s Investment Philosophy Growth Investing. Let’s get into some examples of questions and details.

Charlie Munger may he rest in Peace long ago when Berkshire was growing. Convinced Warren Buffett to begin considering and partially adopting the Phil Fisher philosophy of investing to implement into the Berkshire’s strategy. If I remember correctly this video should help. Warren Buffett starts by sharing Phil Fisher’s Book is one of the best Books on Investing.

Who is Investor Phillip Fisher

Philip Arthur Fisher was an American stock investor best known as the author of Common Stocks and Uncommon Profits, a guide to investing that has remained in print ever since it was first published in 1958. Mr. Fischer basically began using his insights as a Investment Philosophy. Example, assume If a stock is going to outperform the market longterm? In this case it does not matter what the current price is! Becuase the performance over time will outpace the price volatility and increase if you have done your due diligence and leg work correctly.

Mr. Fisher focused on Qualitative Fact finding and positive assumptions backed by verifying tangible information. The fact he did such heavy investigating is that his findings may lead to a Stocks growth and having the right information for his investment fundamentals over the longterm.

Put another way? Qualitative investing requires assumptions about the future that are made on the basis of quality. An analyst will make judgements on the prospects of the stock based on the qualitative attributes of the company.

Mr. Phil Fisher career began in 1928 when he dropped out of the newly created Stanford Graduate School of Business (later he would return to be one of only three people ever to teach the investment course) to work as a securities analyst with the Anglo-London Bank in San Francisco.

Growth & Qualitative Investing

Mr. Fisher wrote in his book detailing a basic checklist that helps investors sift and sort through Stocks and Investment Opportunities using Qualitative and a checklist of sophisticated questions that arrive at a “YES,NO or Maybe” conclusion. This strategy of investing gave birth to Growth and Qualitative Investing.

Asking Questions that helped Mr. Fisher?

Does the company have excellent management teams?
How is the Business’s Qualitative Fundamentals on the Balance Sheet rather than using ratios?
Stock Price is not evaluated. So if a Stock is Expensive currently Fischer’s reasoning looks towards the long term growth of the business which will outperform short term stock pricing models.
If a investment fails any of the questions on the Checklist after investing? Mr. Fischer makes it a point to move on selling the investment.
Understanding the Business and what makes the business work? Valuable question.
R&D Spending? If target company is outspending and outperforming competitors? This is a good indicator or qualitative fundamentals at work within the business.
What makes the Business grow? Very important to understand.
Does the Business have repear customers?
Business profit margins must be healthy.
Does the Executive Management have outstanding community relations?
Is the cost analysis and quality controls of the business products and services accounted for? Will this share information about operations?
Is the Companies Management Integrity Unquestionable?
Would you want your family to work in this business? And does the community value the Business’s presence?
Is there room for growth in the space and is the company’s management providing information about current industry forecasts?

These are all questions Mr. Fisher has shared in his Book written in 1958, which have withstood the test of time. And yes many of these questions have evolved with time into my own use. And in all fairness most of these assumptions or questions still very much apply and are used today by Institutional Investors and Professional Investors who manage Fund’s. You may recognize some of the fellow Buffet followers who use these methods of Investigating Investments. Professional Investors and Fund managers like Guy Spier, Christopher Tsai, Li Liu, Chuck Akre, Seth Klarman, Peter Lych, Bill Ackman and many more.

Conclusion

In Conclusion for today’s post on learning more about Growth or Qualitative Investing Philosophy, we must look at what works in the markets as legitimate Investment Philosophy and what doesn’t work. If you consider most individuals investment experience and ability to mitigate and consider investment RISK. Most retail investors who day trade do not have Advisors. This ends up making them lose money and treat the Stock and Credit Markets like a Casino. Their goal is always the same. They are hoping and praying that twenty dollar stock they just bought with their life savings will rise in the next week or few days. But this is absolutely not how the Professionals invest. Nothing about investing can be done from feelings or judging ones own intuition! It takes serious investigation and professional trained discipline.

Individuals who don’t use any Investment Philosophy will likely be humbled by the sudden unemotional Market Volatility. Magellan Fund Manager Peter Lynch loved volatility for this exact reason. He used volatility to invest as a Value Investor during times were Fearful. So in all fairness? I think it’s safe to say after reading the Book by Mr. Phil Fisher the more sophisticated detailed and creative questions we ask about a Investment opportunity? The better off we will likely be years down the road. Thanks for reading everyone Please do read Mr. Phil Fisher’s book. Uncommon Stocks and Uncommon Profits.

I appreciate you reading my Post. It was a blast preparing this for you. And to my fellow Professionals who do run Investment Funds and use Mr. Fisher’s Investment Philosophy? Please do drop me a line to correct anything I may have written or shown in this post that is incorrect. I am doing my best with what I have. Thank you. JS

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.

Business Articles, Investing, Investment Vehicles

“Exchange Traded Fund” ETF Basics

Many Business professionals would be shocked to find out that a basic Exchange Traded Fund on the NASDAQ, New York Stock Exchange or on Japans 225 funds that make up the Nekkei Index are all either UIT’s or Open-Ended Funds (Mutual Funds). This article’s purpose is meant to identify and educate more executive business leaders about ETF’s you likely see daily listed on TV or on the many Stock exchanges.

Before we are able to begin listing the different key components that make a Exchange Traded Fund. It’s a good idea if I share some basics to help you understand the ETF’s are complex Financial Vehicles. And for today’s article we will be touching on UIT’s, and Open-Ended Funds. Because that is what the majority of ETF’s are! Unit Investment Trusts and Open-Ended Funds. Interesting stuff right? Lets breakdown the basics of UIT’s and Open-Ended Funds.

Unit Investment Trust “UIT”

What is a Unit Investment Trust? Great question! According to FINRA‘s Website:

“Unit investment trusts, or UITs, fall in the same category as mutual funds and closed-end funds. All three are investment companies, which means they pool money from many investors and invest it based on specific investment goals. The key difference with UITs, however, is once a UIT sets its portfolio, it remains the same for the life of the fund (barring any major corporate events, such as a merger or bankruptcy proceeding) and the term is fixed.”

Investment Company Act of 1940

The key to understanding ETF’s is the fact all ETF’s are Investment companies. If I share more descriptively. A ETF is a Pool of Money that has been legally established as an Investment Company. Now we need to dive slightly deeper into what is “The Investment Company Act of 1940?” The S.E.C. Securities and Exchange Commission. The S.E.C. states on it’s website :

Additionally The Act was signed in to law by President Franklin D. Rosevelt who felt the need for Regulation after the Stock Market Crash of 1929 destroyed so many and especially after the Great Depression left its mark on America’s tattered Finances. The biggest thing I would like to leave you with to know and recognize about the Investment Company Act of 1940 is the fact this Law is a regulatory framework for retail investment products and vehicles. Most importantly the Act leaves Fund Managers and Financiers with three categories of Investment Companies to make offerings. These Company categories are “Unit Investment Trusts” UIT’s, (Mutual Funds) Open-Ended Management Investment Funds and Closed Ended Management Investment Funds. It’s very important to discern the Requirements for Investment Companies are based on their categorization and offerings of Investment products or vehicles.

Open-Ended Management Investment Fund

All a Open-Ended Management Investment Fund really is in most cases is a Mutual Fund! It’s very simple. A collection of Securities or Investments organized into a Pooled Investment Vehicle as a Investment Company. Here are some facts about Mutual Funds. An Open-Ended Fund continuously makes new Shares available to the Public for purchase. These funds are professionally managed and often are able to negotiate and procure Investment vehicles at a discounted price that is not available to Retail Investors. Most Retirement Funds and Retirement Accounts prefer the ease and efficiency of Mutual Funds for Investment Vehicles. Open-Ended Funds can be Growth Oriented, or even Mixed with Alternative investments used as Products inside the Fund. And this is why they make a excellent vehicle for Exchange Traded Funds.

Exchange Traded Funds

By now I think your catching on to the fact Exchange Traded Funds can take many forms or basically be a Investment Company formed into one of three categories Unit Investment Trusts, Open-Ended Funds, Closed Ended-Funds. It is remarkable that when you breakdown the basics of “What a ETF is?” you find that most Exchange Traded Funds are a unmanaged UIT or a Mutual Fund. I do hope you learned some things reading this week’s article. And in conclusion stay tuned! I feel it’s only fair for me to revisit expand on Closed-Ended Investment Management Companies in the near future. But for today? After doing some heavy studying. I felt it was really interesting to write about the fact that 70% of the ETF’s in the OTC and Big Blue Chip Markets? Are UIT’s and Open-Ended Funds are just Mutual Funds. I hope you found this article interesting and educational. This was something I felt could be useful and I felt it would make for a great little article. In conclusion. I would say, stay tuned. Big NEWS next coming week. Thanks for stopping by. Please feel free to contact me. HERE.

Godspeed

Business Articles

FINRA Series 65 Exam Registered Investment Advisor

It’s time for me to go get the FINRA Series 65 Registered Investment Advisors Exam out of the way. Im all in.

It’s Sunday July 31st 6am, Have you seen the incredible fall in the Markets? Are we in a recession or are we not in a recession? It seems the current Administration that decides Fiscal Policy is unable to agree. I genuinely hope you are capitalizing on the correction in the markets as we continue to spiral into a recession.

Goals Keep The Talented, Strong & Courageous Seeking Excellence

Interestingly Ive decided since I find myself devouring content and books about the Series 65 Exam? And after looking at the challenge and rewards? Its time I take the initiative and have the courage to prove to the awesome Mr. Marty Bicknell CEO of Mariner Capital Management. That I can crush the the Series 65 Exam. Becoming a licensed and registered Investment Advisor Representative like himself. Marty is the leader of a very special Financial Services Firm in Overland Park, Kansas.

The really interesting thing about Marty Bicknell and Partner Cheryl Bicknell? They are Entrepreneurs like myself who Consolidated the Money Management sector. I genuinely admire their Grit and Commitment to their mission. They have made a name for themselves. And that track record is impressive.

You find that those who have passed the Series 65 are a cut above most entrepreneurs and this adds a level of sophistication and professionalism that Investors take seriously. It can do nothing except improve my life at this time.

What is the Series 65 Exam?

According to Kaplan Financial,

The Series 65 license, known as the Uniform Investment Adviser Law Examination, qualifies individuals to provide investing and general financial advice to clients. Passing the Series 65 exam qualifies individuals as Investment Advisor Representatives (IARs).

Obtaining the Series 65 license is important for representatives who provide advice on ERISA-regulated retirement accounts.

Why I decided to add Investment Advisor to my list of Qualifications?

Along my journey of Mergers and Acquisitions, and also learning to become a detailed oriented Value Investor like Warren Buffett and building a track record of positive 39.1 % in annual growth. I find myself being asked questions about Investing and money by many Tradesman like Roofing Contractors, Electricians, and even many White Collar Professionals.

“How should we invest for the Future? And “How can I grow my money?”

All incredibly important questions. Legally I am disqualified and unable to provide Investment Advice for Payment without first passing the Series 65 exam and registering with the State and SEC. But first we need to do a bit of educating and bringing you up to speed about Financial Literacy.

I have found 95% of Americans have absolutely no clue what I am talking about when I get in the details of Corporate Finance, and financial strategies inside Investing? It’s like I am talking Greek. But Good News. I find it very interesting to sit and listen to peoples financial plans and futures. That develops into some very interesting Coffee Talk. It’s incredibly clear underperforming assets are on the mind of Investors and Wealth Mangers alike.

Since these Professionals are calling on me and asking for direction to serve them on future investments or ideas? I find, I might as well make myself useful in the name of Community Service and take the Series 65 Exam and build a Financial Services Firm or business from my growing experiences in Investing, and Corporate Finance. In all honesty? I could always use the cash to fund Community service Projects as a Non Profit. Or grow my own Investment Fund. Which is the goal.

A Registered Investment Advisor is your Strategic Investment Partner and Financial Services Firm Professionals

Wealth Management

When we look at the growing opportunities within the Credit Markets, S&P Index Funds, or New York Stock Exchange? We see lots of opportunities for Professionals to invest and leverage the growth for their Retirement options. After all strategically investing to receive a Monthly Payment from a Mutual Fund, or Customized Strategic Investment is very smart.

More individuals, Professional Tradesman like Electricians, Contractors, Professional Basketball Players, Baseball, Football, and even Attorneys who can start preparing accounts that can grow organically from the Stock Markets rise and fall. It’s important to point out and zero in on this point. If you are having doubts about investing in the Stock Market? You absolutely SHOULD!!! For to long Asset Management Firms have become so large and lazy the just do not care about maximizing the investments they hold for you.

However with a personable trustworthy relationship with Investment Advisor Representative managing your families wealth or strategically investing assets? You will have an edge when Investing. You have your own personal customized investment professional who can use experience and strategy to build a future of Portfolio Earnings and Gains without suffocating tax penalties that follow most investments. Investing in a private placement fund or strategically investing in a Index is an idea many add to a strategic portfolio. But before I am able to elaborate? I must first pass the Series 65 to have these conversations and establish a professional relationship with anyone.

When your thinking about your future? You need to know what are some of the choices you have for investing. This short list is some of the most common investment vehicles Registered Investment Advisors use to grow your principle investment.

Types of Investments

Stocks.
Bonds.
Mutual Funds and ETFs.
Bank Products.
Options.
Annuities.
Retirement.
Saving for Education.

In conclusion? Many people I have talked to who have passed the Series 65 Exam tell me “It’s difficult! And I barely passed.” All things considered? I do not work for a Financial Services Firm. Which makes the reason I want to take the test all that much more interesting. I want to pass this test because Id like the opportunity to expand my professional skills. And serve the community professionally. Yes I am a Entrepreneur. However I feel I have alot to give. And getting this test out of the way? Does create more opportunities for me as a entrepreneur and as a servant to the community. I plan on taking the test ASAP. And before the FALL. The sooner the Better.

Being passionate about Finance and Investing is an advantage. I plan on using my Geeky curiosity to benefit my Family, Friends, and Community and build a business along the way. Thank you for reading. Im absolutely positive I will have fantastic news to report very soon from taking the FINRA Registered Investment Advisor Series 65 Exam.

Godspeed.

Business Articles, Investment Banking

The Best Investment Banks In Kansas City

Yesterday an Investment Banker from JP Morgan Wall Street in New York City asked me, If I knew who was the top Investment Banks in the Kansas City area? I had to stop myself and ask the same question. The simple truth is? I did not know. So I figured it would be good idea to research the question and find out. Thinking about this in depth? I honestly should know a few of these professionals in case I am ever looking for a specific opportunity, Deal Flow, or advisory referrals. So I started calling around about who’s who? And these are the recommendations that made sense.

Interestingly if I was in New York City we would normally be sharing the large Wall Street Investment Banks as my choices. I have several relationships with many of these Investment Bankers but none are in Kansas City. Normally I would list the top Investment Banks for this Article. Banks like Goldman Sachs, JP Morgan Chase, Bank of America Securities, Morgan Stanley and many more. However since I am not in New York City I must look at the smaller Investment Banks in Kansas City. These are going to be my short list of choices for the short term. Or at least until I am able to meet more of our local Investment Banking Professionals in Kansas City.

Its true the Kansas City area only has a few known local Investment Banks within our community. The first Investment Bank I would like to recommend is our most well known. Interestingly, I have had the privilege of meeting it’s Founder many years ago. It’s founder Mr. G. Kenneth Baum and His family are known supporters of our gorgeous Gallery Nelson Atkins Museum of Art. And the families philanthropy work is known and generous as well. Mr. Baum’s Son is now in Command of the Family Firm and has been leading the firm to a exciting future.

George. K. Baum & Co.

Frontier Investment Bank

The second in line is Frontier Investment Bank and for all intensive purposes according to my Business Attorney this small boutique Bank is top notch and the list of Transactions completed long. When experience, leadership, and market research count? Im very positive that if you need your business sold at fair and favorable terms. This is most likely a Investment Bank that can do that for you and help with a long list of Advisory services. I will be reaching out to ask the Lead Sr. Executive and Attorney Mr. Patrick J. Trysla, “How he has built his remarkable team.”

Country Club Finance | CC Capital Advisors

Several weeks ago I opened my Email and found typed out a personal Invitation to attend Country Club Banks CC Capital Advisors State of the M&A market in Kansas City. I sincerely did not know what I was about to find. But when I arrived I met someone who honestly spoke my Language “FINANCE”. And this alone made me think? Maybe this is going to be very interesting. See here’s the thing. For about 2 and 1/2 years I have been basically alone here in Kansas City as a Entrepreneur with a incredibly unlikely story.

Most local Investment Bankers and Finance professionals have zero clue I really am trying my best to learn all about Finance. And most importantly be of service and be valuable for the Finance business community in Kansas City. But the reality is this. I have not been able to capture the interest of this very exclusive community until now.

CC Capital Advisors 1 Ward parkway Kansas City Missouri

Let’s finish with this CC Capital Advisors. I walked in Country Club Bank and dropped my Coat off for this evening reception and events. Immediately I spotted a few older Gentleman who looked like they were the Professionals who knew what they were doing. I immediately could tell they have been to war and won within the Finance community. I was impressed to be able to meet CC Capitals Team. First off to shake my hand was the warm astute Mr. Christianberry who greeted me casually, and next to him was fellow MD’s Mr. Conway and Mr. Hense Jr. who also welcomed me. First things first. I could honestly tell these fella’s are very experienced. It was clear they were literally professionals I should strive to be like. They welcomed be warmly and we talked shop and the current M&A market for about 10 minutes.

One thing that sincerely I should probably share? I am genuinely thankful for the Privilege of meeting these Managing Directors of CC Capital Advisors. I hope one day soon to spend some more time with these fellas. They truly impressed me. The presentation CC Capital Advisors was spearheaded by Stephanie and Mr. Conway. The market of M&A in the Kansas City area, basically confirmed what I have been hearing and seeing from New York Investment Bankers. When the entire Presentation was finished? I sincerely was blown away at the facts and market information I had just reviewed. It was exactly what I had been seeing from my vantage point across the country. These two did a fantastic job. I was again very Impressed.

Please take the time and if your in this small community or interested? I would like to suggest you read the State of M&A in Kansas City provided and written by CC Capital Advisors. They honestly have done a outstanding Job making the information easy to follow. I wish others in other Markets like the South West would be this easy. Here is the link to the Report. PUBLICATION M&A KANSAS CITY

In conclusion I would like to include CC Capital Advisors on this short list of Investment Bankers in Kansas City I would recommend. Its a very small community. And it’s been my experience? If you treat others well? They will be helpful to you as entrepreneur. And if your Investment Bank and Advisory Team have my tough stamp of approval? You must be doing something right.

This list is obviously going to be very short. However within a month or just inside a few weeks? I will be able to expand this short List. Giving a more detailed look at each Investment Bank, listing more Banks that have trust in this space, and what makes them special? As with anything. Highly specialized industry leaders, professionals, financial services and capabilities are the deciding factors who becomes the most influential and trusted Organization within any industry. Please Stay tuned as I meet these professionals and begin listing what makes their firms the choice for you.

What is Kansas City's Best Investment Bank?

According to Investment Group Partner and Notable Kansas City Entrepreneur Kc’s Best Investment Bank is G.K Baum & Co. Sharp chose this on the merits in light of him personally knowing and trusted this Banks Founder. Legendary Financier George Kenneth Baum.

Thank you for reading, and I just need to share this thought. This list will not include local Business Brokers. This listing will be my personal picks of who I trust as a Partner. Since I am on a World Class team of Investment Professionals.
Stay tuned. JS.

Business Articles, Hedge Fund Articles

Bill Ackman’s Eight Investing Principals That Make It Rain!

If your a serious Speculative Investor? You will definitely want to read todays post on the Eight Investing Principals Wall Street Hedge Fund Manager Bill Ackman uses as a foundational Business strategy.

Most Wall Street Investors do lack depth of strategy and emotional Temperament. So it’s vital you study successful Fund Managers and reengineer or use their strategies. Mohnish Pabrai is always laughing while saying “He is a Shameless Copier in Business.”LOL I admit that’s insightful.

Members of Congress has a incredible investing Track Record. Is it because they have inside knowledge? Or are their Advisors doing shady business on the side? Who knows? However If you haven’t been paying attention to their investments that are publicly listed? You maybe in for a surprise. Be sure to check them out here! If you haven’t know about ValueInvesting.IO? You may want to go check them out. They keep up to date with Congressional Members Investments. And you may reach the conclusion that I have. Something just doesn’t add up. If they are using Material Inside information? That’s highly illegal.

If you think about the members trading strategies? It’s a great example of missed opportunity and I see many people on Twitter copying their trades. It’s surprising how incredible how they often receive above 20 to 30, to 50 percent returns annually. Its almost too good to be true. However I digress. Today I am sharing amazing value. From the Mr. Baby Buffett of Wall Street and the King of Activists Investors, The talented and always respectful Mr. BIll Ackman.

Before I continue, I should share: Even though my name is not known in hardly any Wall Street Investment Firms? My crazy entrepreneurship story is certainly gaining traction. It certainly is unique. How many entrepreneurs do you know who just said screw it and began studying the moves and strategies of Fund Managers like Bill Ackam? After all Professional Investing is something one can learn from just reading and being in the Market. Passion and grit are absolutely required. Most Big Firm Partners value a young guys working incredibly hard and demonstrating results that benefit their future success at the firm. Meritocracy comes to mind. When you put others interests and success first? You make friends an alliances quickly. But sometimes you can make enemies fast and jealous. That’s a Fact.

The basis of most value investors I know? Is to be curious and keep asking questions. If you just keep asking questions a someone who doesn’t know a subject or topic? Your curiosity takes you on a journey of discovery. And sometimes that journey of discovery? Is extremely profitable. Just keep asking questions. And learning as you move forward as a Value Investor. Benjamin Ghraham is a Man you should research if your interested in learning to become the next Bill Ackman. Watching everything Warren Buffett and Charlie Munger has said on video helps as well. The intrinsic value of being among Value Investors does pay massive dividends. But its all up to you! Do the work. And your do your Due Diligence.

So what are the Eight principals Ackman and follow when targeting companies?

Simple Predictable, Free cash flow regenerative dominant companies, With large barriers to entry That earns high returns on capital, With limited exposure to intrinsic risk we can’t control?
Strong Balance Sheets Don’t need access to capital to survive, Excellent Management, and Good Governance

Pershing Square Capital Management
– Bill Ackman

What are Bill Ackman's Eight Investing Principals?

Simple Predictable, Free cash flow regenerative dominant companies, With large barriers to entry That earns high returns on capital, With limited exposure to intrinsic risk we can’t control? Strong Balance Sheets Don’t need access to capital to survive, Excellent Management, and Good Governance

In conclusion for today’s post? It’s very sensible to believe that if you adhere to and strictly follow these basic guidelines and principals while investing? You are surely going to be in great shape. If you go back in time and look at the trades or positions Bill and his team has made in the past that failed to perform or wiped out half his Hedge Fund? The principals were not followed. Leaving them exposed. And that is a lesson on keeping true to your education as a Value Investor.

Thank you for reading and I do wish you all Investment success.
Godspeed

Business Articles

Types Of Accredited Investors?

Are Entrepreneurs looking for Partners and Investors in all the wrong places?

Often times Entrepreneurs do not stay curious, they become masters at limiting their own growth and Investing is not a priority. This post will share why you should always keep learning and keep expanding in your own business space. There’s always another level if your willing to take the time and learn. If you are a serious entrepreneur, managing partner of a fund or apart of a Investment Group? There are qualifying questions you must ask to justify the start of a Business relationship with sophisticated investors. And just so people realize this point. Me or my Partners do not just talk to anyone with a few hundred thousand bucks. But if your a serious entrepreneur that has a interest in financial services and joining the Major Leagues of Business investing this is an article you will want to definitely read.

Interestingly last week I met with a Kansas City Accountant from BKD which is a large Transaction advisory Accountant firm in Kansas City. We spoke to each other about attractive investment assets to buy. And must use personal discernment and be very selective and understand the business before investing. If a Investor brings to the table One Hundred Thousand or Fifty Thousand Dollars with no background as a Professional subject matter expert, Accountant, Attorney, or Enterprise Board Member? The answer is a fast but gentle “No Thank you I would not be a good fit to partner with you.” The reality is there are people who have money. But are not accredited investors. Choose your partners wisely.

Their are Non Accredited investors and then Accredited investors. There’s a big difference. And that’s one reason I am writing this guide to share the 3 levels of Accredited Investors for serious entrepreneurs. We will get more into this later.

I must be share there are literally many Con-Artists and Fraudsters in Financial Services. So you must pay close attention to who you consider a professional inside Financial Services & Investing. This article will also give you incredible insights on what to look for when looking for qualified Investors as partners.

Unspoken Rules in Professional Investing

Ok in the Big Leagues of Professional Investing it’s likely that if your not referred by a trusted friend, Board Member, or Corporate Officer/Executive or someone who has a Professional Investment Track record? You don’t entertain any conversation with this person. It honestly is a closed society and sort of Mafioso.

Investors are anything but alike

This will honestly probably disappoint many people in my community. I do not partner or accept money from Non Accredited Investors. But the truth is there are only 3 types of Investors I would choose to partner and work with. I will absolutely go more into detail about these 3 types of Investors. You may want to know this interesting fact from DQYDJ.com This potential investor group is not as small as you think.

We estimate in 2020 there were 13,665,475 accredited investor households in America. Roughly 10.6% of all American households were accredited in 2020. Further, accredited investor households controlled roughly $73.3 trillion in wealth in 2020. They controlled around 76.3% of all private wealth in America measured by the 2019 SCF.
DQYDJ Investment Homepage.

3 Investors Who Should Be On Your Radar

But first let’s look at some basic guidance to keep you safe along your journey. Fund managers live by this guidance, and so should Entrepreneurs. Even though your preferable investors are High Net Worth Families and Individuals, you should keep this at the forefront of your responsibility as a Professional Investor or Entrepreneur.

Never accept one dollar from Grandma’s One hundred and Fifty Thousand Dollar life savings.
It’s your fiduciary duty to ensure the person who partners with you has a level of sophistication to understand the risks of start-up investing.
It’s preferable to avoid Start-Up Capital Intensive Businesses as a Entrepreneur
It is also very important that you do screen out and disqualify Investors who are not Financially Literate
It is imperative Entrepreneurs must study and get familiar with Federal Securities Law
Have a Business Attorney as someone who can watch your back and advise you along your career.
Have Advisors you can turn to as a Professional who can introduce you to someone or give you pro guidance.
BE A COMMUNITY LEADER – Take responsibility for people who don’t understand what they are asking.
Don’t be a FRAUD, ALWAYS BE TRANSPARENT, and NEVER EVER BE DISHONEST!!

The Accredited Investor

The SEC defines an accredited investor as either: an individual with gross income exceeding $200,000 in each of the two most recent years or joint income with a spouse or partner exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year.

If your a Entrepreneur, Executive, or Professionally savvy Investor you will recognize and most likely appreciate I am taking the time to detail what exactly the definition of an Accredited Investor is. And it is a small population when compared to the United States Population as a whole.

A Qualified Client

This definition comes from my personal relationship with the good Partners and Attorneys of New York City’s International Law Firm Paul Weiss

A Qualified Client according to the SEC 2021 is a Client that has a 2.1 Million Dollar Net Worth Excluding their home.

has at least $1.1 million in assets under management with the investment adviser immediately after entering into the advisory contract; or
the investment adviser reasonably believes, immediately prior to entering into the contract, has a net worth of more than $2.2 million.

Please be sure to read the SEC up to date Investment Advisors Act of 1940

THE SEC UP TO DATE DOCUMENT CLICK HERE

Qualified Purchaser

What is a Qualified Purchaser? A Qualified Purchaser has a Five Million Dollar Net-Worth excluding their primary residence. QP could also be a Entity with Twenty Five Million in Assets and their primary business is not investing. It’s an actual separate company or entity.

Here is the Thomson Reuters Practical Law Definition in detail to keep things on the up and up and legit!

CLICK HERE FOR FULL DOCUMENT & EXPLANATION

Keep yourself moving through the roadblocks that deny you access

Are Entrepreneurs looking for Partners and Investors in all the wrong places?

In conclusion,

It feels like I should share the reality I faced as an Entrepreneur who had no financial reputation seeking influential mentors. I was literally meant to fail and go away to do whatever Entrepreneurs who fail go and do. But I didn’t fail. I kept going and being curious. Here is a quick story and reality I faced not knowing that everything I faced was rigged and stacked against me. If it wasn’t for my curiosity and my tenacious ability to withstand punishment and pain? I would have surely never discovered the next level in business finance and the strategy to get their. Please read on!

When I first became an Entrepreneur I had a suspicion that I should go seek out and talk to professional fund raisers. Most of these fund raisers viewed me as a waste of time and not worth a call back nor worthy of a personal meeting. They ignored me, disrespected me in the open. I took all this mistreatment on the chin. I in return did not play their dirty passive aggressive games. They reacted to my calls and visits as if I was a threat and unworthy of their valuable time.

But now these day’s I am not easily dismissed any longer! My market value has gone way up. All because I put in the personal work and received a real financial education. I have done all this by experimenting, researching, and having great teachers inside the Real Estate and Private Equity Fund space. These same Attorneys and Fund Raisers now openly ask me to collaborate on projects and campaigns with Investors. I have proven myself as a fierce competitor. The goal of today’s post, was to share with you. Even though you may feel you know everything about your business space? I promise you most likely should stay curious and stay insanely competitive.

Thank you for reading everyone. Id be happy to hear your thoughts below. Have a wonderful Holiday Weekend.

Godspeed -JS

Business Articles

M&A Proprietary Deal Flow

Most Business Professionals are going to find creating Proprietary Deal Flow on their own without help ridiculously difficult. But if you have a good attitude and use your own professional networks. You may just have a fighting chance. How does a entrepreneur become known as someone that will look at your deal? It just kind of develops on it’s own and happens. Here is a story how I was approached by a Veteran Brother to look at a deal.

How can a Entrepreneur create Proprietary Deal Flow?

If your running a Search Fund, or if your a accomplished Investment Banker, or even Hedge Fund manger creating streams of Proprietary Deal Flow is no easy task. Here’s some fundamentals that will help you along in your search. Let’s get busy.

Some Entrepreneurs, VC, and Private Equity Fund Managers are new school. But most are still using the Old School Deal Flow opportunities. Or better put! Business Partners of a certain wealth level, more likely known as “The good Ole Boy’s Network.” Watch this insightful honest insight form Entrepreneur Naval Ravikant. Oh! Click to read his Almanck Book.

Is Proprietary Deal Flow dead as Naval shares? That depends on who you ask.

First we must list the different way’s many Entrepreneurs, VC’s, Private Equity, and other Investors access Deal Flow Opportunities. And the truth is this. It comes down to your track record, credibility, who you know, and people you currently do business with.

Who do you know?
Angel Investors?
Professionals in your Industry or Space?
Successful Entrepreneurs & Other Business Personalities?
The Good Ole Boy’s models as I like to say?

All great questions of who? Now what actual tangible useful advice can I share with you to begin building that network of Deal Flowing opportunities? This is where it pay’s to be a shrewd networker and belong to certain communities. Truth is I am always strategically looking to develop my network and deal flow opportunities. I must share this particular post will be about being a member of a group that is across the world. Yes I do belong to a few networks that involve groups of men that have served our Country in the Elite Special Operations community. Its a fantastic community to be involved with. Their is always someone who served in Uniform that ended up being a Professional in business somewhere. This community Is packed full of professionals that are great to know!

For purposes to share how opportunities happen. I would like to share with you this short story. A good friend and Veteran Brother who is a newly retired Army Special Forces Green Beret. Let’s call him John.

John is undoubtedly a professionally trained Bad Ass Guerrilla who served in Afghanistan and also has a Business MBA. He was up until recently the Chief Operations and Development Officer for a Harley Davidson Product company. This business is growing because of who John is and the groups of men he knows and activities he does on the weekends. This company manufactures a part for all new Factory Harley Davidson Motorcycles.

Listen to this. We follow each other on Instagram and have known each other for sometime prviously in the SOF community. I ended up doing some professional work with a former Team Mate of Johns. And we got to know each other online over time and through friends of friends. John had messaged me he was moving on in life from his position at his company. And the team who built this company wanted to sell. Interestingly this Business has a impressive Hockey Stick sales profile. And is growing literally quarterly. Annual Revenue was right at about 20 million dollars. The owners were motivated to sell. Since they are ready to retire and move on with life.

If you like this Post Check out my previous post on if you should Trust Business Brokers?

At the end of this opportunity it was fast turning into a Broker pursuit. And my mentor and business partner was persuasive enough to share with me we needed to stick with our own industry and strategy. But it was neat to look at this company.

With this story complete you can see having a personal network or belonging to a member only club that expands across the world is ideal for deal flow opportunities. It seems I should probably go into more strategies and developing business relationships to expand on this a very wide subject. I do hope you received something from this moderately long post. Because in the end it’s gonna most likely be people who know you and your business reputation that will approach you. And they will come from all walks in life as Naval Ravikant shares in the Video.

Thanks for Reading & Godspeed!

Business Articles

Search Funds

Entrepreneurs Are You Ready To See If Your Worth Your Salt? This guide explains more about Search Funds. If your needing structure. Search Funds may be a unconventional option for you.

Let us define Search Funds.

How many search funds are there? Irving Grousbeck, a professor at Stanford University’s Graduate School of Business, who originated the concept in 1984 while lecturing at Harvard Business School. Since then, it is estimated that 627 traditional funds have been or are currently being formed, with 198 operating currently.

Good day to all the visitors who showed up to read the Investment Fund advice. I genuinely would like to Thank you. Your here probably because you have an interest in Search Funds for Entrepreneurship through Acquisitions. Let’s get down to Brass Tax and open up with the two types of Search Funds I am privy to.

Self-Funded Search Funds
Investment Fund Backed Search Funds
Private Equity Funded Search Fund
Private Individual Funded Search Fund

Both are polar opposites from each other. And honestly I have to be straight with you here. If your serious and backed by a well funded Private Equity Firm? I do not feel you will have to work as hard as a Scrappy Entrepreneur who is self funded. That’s my opinion. However I guess the old stand by should be suggested. Warning “RESULTS MAY VARY.” I hope you get chuckle. You are out searching or are about to begin your search for a Company to approach and acquire? In all seriousness there seems to be some assumptions that I am going to address to set up your expectations.

Self Funded Search Fund

I feel the well funded entrepreneur should out perform the scrappy entrepreneur. Because the scrappy entrepreneur who is not as well funded may have to work harder or longer. But! Just because an Entrepreneur is well funded? Doesn’t prove he or she will out perform the poorly funded or scrappy entrepreneur. There are to many variables at play in this analysis.

Self Funded Entrepreneurs are exactly just that. They’re using their own money to cover costs of being on the road and traveling while searching. Usually these entrepreneurs are incredibly resourceful using self taught street smarts and pure hustle to achieve their goals. Uncertainty and being uncomfortable are normal operating environments.

Traditional Search Funds

What is a traditional Search Fund? These are funds that are funded by wealthy private individuals or investment funds including Private Equity Partners. If we really consider the roots of Search Funds. The model originated at Stanford Graduate School of Business in California. A few Stanford Alums raised some funds to search for an Acquisition.

In conclusion wether your funded by a wealthy Private Individual or secured funding from a Private Equity Firm. Search Funds are defined differently by different experts. As I had mentioned earlier “Results may vary.” There are no metrics to discern which entrepreneur will be successful. However from the research I have completed. If you follow a Search Fund Model 60% of Entrepreneurs who adhere to the model of a Search Fund are likely to be successful.

Thank you for stopping by and reading. Please do drop us your email address for new Blog posts as I write them. Because I will be writing a ton more about Search Funds as my own Business model evolves.

Please feel free to share on Linkedin or any groups. And If I missed something in writing this? Please feel free to send me a email and I will consider your information you provide to add to this guide.

Happy Hunting to all Entrepreneurs using a Search Fund model.