Farpoint Group Stock Ownership Policy Change

Of necessity, a change, which may be temporary, in our policy with respect the ownership of equities in firms that are discussed in this blog.

Hey - do you have a company pension plan? I thought not. With longer life expectancies and rapidly-rising healthcare costs, you get to save for your own retirement. And many of us actually end up managing these investments as well, making key decisions as to what to buy, hold, and sell.

While I find the stock market absolutely fascinating (it requires, after all, the same analytical skills that I use day to day in a different context), I just don't have the time to perform this management task, or so I thought. For the past six years I've hired managers, who charge on the order of 1+% of the value of the portfolio on an annual basis, to make the key decisions here. And you know what? I recently read that 92% of professional investment managers, and mine in particular, do not beat the basic market indexes, year-in and year-out. This is perhaps to be expected. After all, as an analyst I can assure you that no one can predict the future with anything even close to 100% accuracy in any field. And the only person ever to do this in the investment world is, after all, now in prison for the rest of his life. But, still, you do the math - 1% per year over n years, and there goes a vast chunk of the money you'll need in all those years you'll be living longer. So, then, as many others advise, screw the advisor community. Buy index funds. I'm obviously not the only one with this mantra today. The S&P 500 goes up, historically, anyway, in eight out of every ten years, and by roughly 9% annually overall. Sure, you can do better - 8% of you, anyway.

So, anyway, I have fired the latest (and, I think, last) manager of my retirement funds, and will now pursue the index fund strategy myself. There will be a transition period during which I will own some equities directly related to wireless and mobile (these having been purchased by said fired manager), and I will disclose any positions as appropriate in any postings here. But, look, I'm no stock picker. While the analytical skills are similar, the context and data have little to do with my day job. So I assume this challenge is temporary, even though I'll no matter what end up once again with an ownership position in equities of firms in my field, albeit with a level of indirection, as before, in the middle.

Just so you know - and I promise not to let any equity position bias my viewpoint. For example, I (much to my surprise) own Microsoft. While the stock has done well of late, apparently driven by hope over a new CEO, I'm still, putting it mildly, no a fan of almost everything they do. Anyway, I think it's important for analysts of any type and in any field to declare anything that might be construed as a conflict of interest, hence my notes here. It's my objective to move everything into index funds over time, but such will, in fact, take a while.

For now, though, I own (in alphabetical order): Amazon, Apple, Cisco, Google, Intel, Microsoft, and Qualcomm. I will post any meaningful changes in these positions should such occur, but, again, I anticipate being out of individual equities next year.

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