uncystu,
I don't want to come across and sound like a smartass , but I always had in the back of my mind that this whole saga could be a confidence game to get control of investors money and was more to benefit the manager and associates rather than the shareholders. I have seen with other companies, where assets have been inflated artificially and passed from entity to entity to achieve this purpose., and I couldn't help but be suspicious. On the other hand once the stock price started moving, I wanted a piece of that action and I jumped in for awhile and grabbed it.
I don't have a problem paying for good investment managers and even though i'm suspicious , I have realised that I need to trust someone at sometime or I would never invest anywhere but bonds or term deposits. I firmly believe, despite what some posters might say on Hot Copper, that it is impossible for the average investor to invest large sums of money in a diversified and responsible manner direct into stocks and business. The level of expertise and insight required is too much of a task for someone doing it on a part time basis. This is the main reason that I invest in LICs, I don't have to spend the time reading individual companies balance sheets and every single announcement, so I pay someone to do that for me. I find that investing in LICs I can take a much broader approach and it limits the amount of research that I need to do. So for me I am looking at macro events, researching different manager's and their investment styles, manager's performance and also looking at discounts to NTA and opportunities to capitalise on those discounts where I can. As far as money managers go I am looking for people who are conspicuous and have been visible in the industry with a track record and worked for reputable companies.
As far as my statement about the person ultimately being responsible for your money is you, or me, let me try and explain.
In no way do I mean that people that misappropriate your money should not be held accountable , they should be dealt with by the full force of the law. Unfortunately , that has not been what I have mostly witnessed in corporate Australia. It is very easy for people to come unstuck and get lured in by big promises, fancy brochures, exciting websites and the like and also get sucked into the hype when shares are running hard.
Even so everybody has a choice and before handing over money to invest, buying stocks, investing in housing, whatever it might be take a step back and look at the risks involved. Look at what might go wrong, look at ways of minimising the damage if things do turn sour, sleep with one eye open if you like. It might mean investing across of broad range of investments and spreading your risk, maybe invest in sound , conservative, well managed, well trusted LICs like your Argos or Miltons etc.
Even if Stuart did make the 100% a year that was touted by a certain poster, it was always going to be high risk. Was HML the investment for a self professed novice investor, I think probably not. That is not criticism by the way, we have all made mistakes but these mistakes give us a chance to learn. So when I say you are ultimately responsible , it's more a mantra for how to think about who you might trust and to dig a little deeper, and to set up a psychology that will help you manage risk better and help you avoid investing in another HML. Maybe direct investing isn't your thing, maybe you don't have the time, it might mean sounding out a professional that you can trust and direct you.
As far as trying to hold people accountable I admire your spirit and drive. I have lurked in the HML and BHD threads and I can see you have spent an enormous amount of time and effort pushing for things to happen. I know it is a battle that you are passionate about but I hope it doesn't consume you and I really hope you come out the other side with some faith in investing and the markets. There are some good people out their trying to do the right thing, yes they benefit nicely , but they are still acting responsibly and have shareholders interests at heart. On the flip side there are a number of people and companies to avoid, the trick is learning which are which.
Personally I have followed the share market for about 25 years and have been investing for the last 18 years or so. I am now at the point where i'm earning more from my investments than I do in my full time employment and I am going to take a few years off at the end of next year before deciding what to do with the rest of my life. I would spend ten to fifteen hours a week of my own time reading and looking at reports, announcements, articles, books etc, chasing up new funds or investment opportunities that I might come across. I read the business section of The Australian everyday. I am also fortunate that my work is not too demanding and I get a good look at the ASX most days and I am able to pick up some trading opportunities. You are right it is a part time job for me, but I thoroughly enjoy what I do too. I actually run two separate accounts too, so I have approximately 80% of my money in long term LICs that I let pay me dividends and the other account I try to trade in and out of positions when appropriate to try boost returns. I also enjoy the challenge of trying pick up a few extra percent returns, so will try and use the discounts and price movements of LICs to my advantage.
Before I go I will lead you with two tales of people I know. One was a disaster, the other a near disaster.
A former customer at work, a nice guy in his early forties, invested all he had plus borrowed money into one of the managed agricultural schemes that was going around about ten years or so ago. As it turned out the only people that were making money were the financial advisers recommending the scheme, and the people running the schemes and it was later reported in the media that advisers were being paid as much as 10% commission of the investments. Effectively it became a ponzi scheme and the only way to pay old investors was to get new ones in. When it went belly up he lost everything he had plus was in debt for a few hundred thousand as well. He became so sick with worry he was a shell of his former self and was on the verge of ending his life, very very sad.
When I first started out investing I went to every investing and trading seminar around. In the early 2000's they were every where. I went to a property investment seminar with a mate of mine at the Hilton Hotel in Adelaide and sat through an hour video. The video told us nothing but was basically a motivational tool to try and make you "seize the day" and act before it was too late. At the end of the video they invited us to book an appointment for a one on one session with a property investment specialist at another time and at another location. A week later me and my mate took a day of work and arrive at an office building with no signage and no sighs of life, We went to the designated floor and sat outside an office with the company's name that was stuck to a door with a black and white name printed on an A4 sheet of paper. Alarm bells are ringing. I was invited into one room and my mate went into another office with another guys in suit and ties. I sat in this office that was bare apart from a cheap desk and two cheap chairs and listened to some salesman tell me that this company would make me rich beyond my wildest dreams. He and his colleagues would teach us how to invest in property and all I had to do was choose between a $15K, $30K or $50k education course and pay a $5k deposit. I got up and left after ten minutes and waited outside for my mate for about an hour. He signed up and gave them authorisation to charge his credit card for the $5K deposit as he was going to complete the $50K course. There was supposedly a cooling off period, so I nagged my mate to reconsider and after two days he rang them and cancelled and luckily they refunded his deposit. The person running the company appeared in the news a few months afterwards, his name is Henry Kaye. Google him if you have time.
The lesson is be careful, things aren't always as they seem. What might appear to be a silk purse may actually turn out to be a sow's ass.
I wish you luck and hope that one day HML will be a distant memory for you and a handy learning experience.
By the way, I am just an amateur trying to share my own experiences. There are far wiser people than me on Hot Copper, and again, while I would always suggest treading with caution, there are some really valuable insights .
