Tuesday, January 6, 2009

New "Pledge" Sheet - Obama Era v 2.0

TweetThis
Ok folks, almost a year to the day due to popular demand (I was asked often when I'd actually get started) I created a post I called a pledge sheet for readers interested in future investment when a true mutual fund was born [Jan 7: Reader "Pledges" Toward Mutual Fund Launch] Ah, we were an innocent bunch then - not realizing that in fact Ben Bernanke/Paulson/Bush and crew would not save us from facing the lions in the Coliseum (Collesium). But never fear, it is now a year later and we are trading Paulson for Geithner and Bush for Obama, and this time around we will be saved. And if not, Bobby Jindal/Phil Gramm/Ben Bernanke will save us in 2012! One of these times, someone is going to get us back on track ;)

But I digress... we've just gone through the worst year since the 1930s and many a portfolio is battered. The good news is based on that historical precedent we should not have to deal with such a year again until around 2060. (I wish) And thus far we are on pace for a +300% year for 2009 ;) We were actually doing quite good on our pledges until August 2008 and were up to just under $4M. Then the bear market within a bear market arrived i.e. September/October/November (3 months that shall live in infamy) and hit us. Judging by what all these mutual funds in my 401k and others I look at have done the past year, I assume many readers took serious hits. So, we're going to start from "scratch" since I assume some readers probably gave up on the market completely, others took serious hits to their portfolios, and new readers have arrived.

Obviously I am still bearish on the economy in 2009, but the economy is not the stock market. Further, if the market falls to a level I think it could in 2009, and GeithObananke pull the rabbit out of the hat, we might have a most excellent opportunity in the market by latter 2009. And certainly this era's actions will lead to the investing bubbles of 2010-2013. Probably when people are most disgusted with the stock market, will be the best time to start a fund in fact. But the reality is we don't really need an "up" market or "down" market - except in times of extreme duress this is a market of STOCKS not a STOCK market - there are always opportunities. The past 6-7 weeks have proven that - there have been many excellent money making opportunities in a market that mostly just went sideways. I will also say after the colossal failure of "long only" funds of the past decade 0ur "hedge fund" (without the leverage!) type of strategy would be a more attractive option than ever; not just in the past 10 years but also in the coming 10 as the country faces many challenges. There will always be good stocks to short and go long, and this niche of working both angles is simply tiny in the mutual fund world. So along with the transparency you are getting a taste of (some of which will have to be ratcheted back due to SEC rules), we'll have a unique role that is very underfilled in the mutual fund universe.

So with that said, I am going to make very specific requests on pledges this time around
  1. Assume a 2nd half 2009 launch, maybe Jun 1, maybe Dec 31st
  2. Assume at any point in 2009 the market may be down 30% from here
  3. Make your pledge based on liquid assets that are not currently in some high octane mutual fund that loses 40% when the market falls 30%, nor gains 50% when the market gains 40%. That money is not something that can be counted on with the volatility in this market.
Further, I've sent some emails out in the past few weeks so if you received an email in the past 14 days and have communicated with me, you don't need to send me a new email; I've already included you in this new pledge sheet. Also if you have made a pledge since Dec 1st, 2008 I am going to consider that pledge still valid. But anything before December 1st, I am going to wipe the slate clean.

Same format as before: first name, last initial, pledged amount, and state you live in. Once more, to be clear, you are not sending me money that I'm going to hold until launch when you 'pledge' - you are simply making a verbal commitment "when you are up and running, I want to invest this amount". You can attach a comment to this post or as most people do, send me an email (my address is found on the upper left of the blog) with the above information. I'd prefer an email if possible.

Here are the pertinent posts if you have not read through them
  1. The overall goal and why I'm aiming for $7 approx million [Jan 7: Reader "Pledges" Toward Mutual Fund Launch]
  2. Frequently Asked Questions [May 26: Frequently Asked Questions] Very important to read
  3. Why I need your state [May 23: Investment Pledges by State] I'm also starting this list over
This is a 2 sided street; people always email me "When can you start?". Easy answer: I can begin at "any time" the capital is there - obviously I can just bring the thought process and experience - the readers will bring the funds. Worst case scenario - I am no better than the 8000 funds out there but you get a halfway entertaining monologue along the way. Best case scenario is all upside from there ;) So we'll see how this time around goes and hopefully we're at least halfway ($2M) to where we were before said lions visited portfolios worldwide. As always, thanks for continued readership.

p.s. One more thing to finish this post in this new day and age; due to Bernie Madoff let me reiterate one of the Q&As from my FAQ which seems most appropriate in these times of scandal. The irony is the SEC seems to watch the Martha Stewarts or little fish of the mutual fund world very closely while missing the big scandals - ah, American regulation. Priceless. On a serious note, I cannot recall in the past 20 years ever hearing of any mutual fund running off and stealing clients money or running Ponzi schemes - that appears to be the jurisdiction of the "smart money" (ahem)

Q: How do I know you won't run off with my money?
A: Well, that would defeat the purpose of this endeavor, but over and above that I won't ever see your money. I will be paying a 3rd party source to handle just about everything outside of making buy and sell decisions. So as with any fund, you're going to be sending money, receiving paperwork, etc from someone I outsource to - not named Rising Tide Growth Fund.

Disclaimer: The opinions listed on this blog are for educational purpose only. You should do your own research before making any decisions.
This blog, its affiliates, partners or authors are not responsible or liable for any misstatements and/or losses you might sustain from the content provided.

Copyright @2012 FundMyMutualFund.com