I would like to get feedback from those who have gone down the road to setting up a firm in general and/or specifically for LPs that has a primary strategy driven by a Graham early Buffett-esque philosophy.
From my research and talking to others in my city who went this route, I will need roughly 50M AUM before it can be a fund, should I choose the fund route. I'm running the strategy in a personal account for the last 2 years. and 3 years has been said to me to be a long enough track record, from those who are currently running OPM.
Performance has been 11% in 10', 10% in 11', with no more than 10% DD in any year. Small and micro cap only, NA listed equities. Target is 10% annual return in the long run, with max 10% DD peak to trough.
Questions I have: 1)Clarification on whether my personal account can be used to be the audited track record. ET says no, those in the industry say yes.
2)General price quotes for the paperwork to get this off the ground. I'm thinking maybe 10K?
3)Timeframe I'm looking at to launch. I'd like to do it in a year.
I would like to get feedback from those who have gone down the road to setting up a firm in general and/or specifically for LPs that has a primary strategy driven by a Graham early Buffett-esque philosophy.
From my research and talking to others in my city who went this route, I will need roughly 50M AUM before it can be a fund, should I choose the fund route. I'm running the strategy in a personal account for the last 2 years. and 3 years has been said to me to be a long enough track record, from those who are currently running OPM.
Performance has been 11% in 10', 10% in 11', with no more than 10% DD in any year. Small and micro cap only, NA listed equities. Target is 10% annual return in the long run, with max 10% DD peak to trough.
Questions I have: 1)Clarification on whether my personal account can be used to be the audited track record. ET says no, those in the industry say yes.
2)General price quotes for the paperwork to get this off the ground. I'm thinking maybe 10K?
3)Timeframe I'm looking at to launch. I'd like to do it in a year.
4)Am I being fooled by randomness?
Appreciate any thoughts/comments/criticisms.
Yes you are being fooled by randomness. 10% in two years is the typical return, and after you start netting fees, it'll be around 8%, your drawdown will also increase that much.
The 0.67 calmar ratio 8 to 12 is generically as good as anything will do, and should you continue the next bear market will most likely remove all your gains.
Ok bwol, let's have a conversation here. Clarify how you think that once I start netting fees you think the DD will increase? I must be misunderstanding you here.
Also, clarify how 10% per annum is typical. I've seen a wide variety of returns for the SPX depending on the study, most say 7-8% in the LR. Only Ibbotson has given 10% as the norm. You quoted 10%, so provide a link.
I don't disagree that I'm long only, and if the market should fall I'll hit a DD. But explain how you think the next bear will take away all my gains.
I would like to get feedback from those who have gone down the road to setting up a firm in general and/or specifically for LPs that has a primary strategy driven by a Graham early Buffett-esque philosophy.
From my research and talking to others in my city who went this route, I will need roughly 50M AUM before it can be a fund, should I choose the fund route. I'm running the strategy in a personal account for the last 2 years. and 3 years has been said to me to be a long enough track record, from those who are currently running OPM.
Performance has been 11% in 10', 10% in 11', with no more than 10% DD in any year. Small and micro cap only, NA listed equities. Target is 10% annual return in the long run, with max 10% DD peak to trough.
Questions I have: 1)Clarification on whether my personal account can be used to be the audited track record. ET says no, those in the industry say yes.
2)General price quotes for the paperwork to get this off the ground. I'm thinking maybe 10K?
3)Timeframe I'm looking at to launch. I'd like to do it in a year.
4)Am I being fooled by randomness?
Appreciate any thoughts/comments/criticisms.
almost every no load mutual fund family has a value fund. Many of them with 30 yr track records. Why would I want to take a chance on you?
If that's what you want to do, best bet (if you have any people skills) is to operate as an RIA and find your clients one at a time.
Now is a good time to approach conservative investors that are heavy in dwindling interest rates.
Ok bwol, let's have a conversation here. Clarify how you think that once I start netting fees you think the DD will increase? I must be misunderstanding you here.
Also, clarify how 10% per annum is typical. I've seen a wide variety of returns for the SPX depending on the study, most say 7-8% in the LR. Only Ibbotson has given 10% as the norm. You quoted 10%, so provide a link.
I don't disagree that I'm long only, and if the market should fall I'll hit a DD. But explain how you think the next bear will take away all my gains.
10% a year for 2 years in a bull market is NOT a track record!
If the last 2 years were a bear market your performance would've been -10% in each year, and with that kind of "track record" you wouldn't be thinking about running OPM.
@oldtime: institutional funds have a mandate to invest. Correct me here but none of them as I'm aware are trying the Graham early Buffett method. There are firms using this specific method, but most are closed to the public, at least the retail public.
@MTE: to play devil's advocate, define how 11' was a bull year. I'll give you 10' but only certain select areas made it out of 11 with a healthy positive margin. Especially targeting the small/micro caps.
