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Discussion Starter #21 (Edited)
Yes, you have to start somewhere though. Money managers with high net-worth clients tend to go pretty conservative because they want to keep the client. A lot of it is sales-based, which my friend excels at. You wonder why investors always fall for ponzi schemes and that's a part of it.
 

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argo the american in you is blinding you to the reality.

imho few will give an inexperienced youth without appropriate qualifications or experience their $$ to manage.

if i were seeking a portfolio manager, there are a couple whom i like & respect very much. They have CFAs. They also have CAs plus they have 25 years in the investment biz with 20 years spent directly in discretionary management. They, too, are charging 1%, the same as what you fantasize for yourself, but theirs is top-of-the-line service.

do you want to get where they are ? there's a whole heap of work for you to do first.

speaking as a person who has praised & supported you in the past on many occasions, i'm somewhat taken aback to see how you are flaunting yourself now. I'm almost tempted to ask haroldCrump's question: who are you & what have you done with that sweet, witty, brainy Argonaut we used to know & like so much.
 

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I must say, this thread is filled with what I perceive to be an annoying trait shared amongst Canadians. The tendency to be Debbie Downers and Finger Wagging Paternal Figures, "no-you-can't-do-that", etc. As a Canadian I do this sometimes as well. But the American in me is winning over in this case.. let's just cut through all the red tape and do this. A good plan today is better than an excellent plan tomorrow. If you succeed, great, if you fail you learn something from it.
Love the attitude. Can it be done? Yes. Will it be easy? Probably not. Could it fail? It very well could. Could it succeed? Absolutely.
I commend you for even thinking about it, as it's a route I've considered though not seriously.
I know a couple of guys who started a hedge fund, but it sputtered out as they couldn't get the capital needed, and people wanted several years of results before committing.
What kind of track record do you have managing your own portfolio? How big do you need to grow to sustain a company? What kind of revenues do you want?

My problem with the idea is that to do it right, I think you have to commit to do it full time, but to commit to do it full time, you need a bare minimum of $10 million invested I'd say, though with two people involved that ratchets up to $20 million (I wouldn't take the risk for less than $100K/year at 1% fee).

Course, like you said, you just want to know the "how" rather than the advice.... neither of which I can offer, but best of luck to you and I'd love to hear of any progress, and wouldn't mind hearing about the logistics as well.
 

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Discussion Starter #24 (Edited)
Frankly, I'm not soliciting investors here or anywhere right now. That was not the point of this thread. I wanted to know the logistics behind setting up an investment company, and this being an investment forum I thought it relevant. And the best part is that there's no lawyer or consultation fees. People can choose to help me or not, as I do on other threads.

Based on what I've seen from stockpicking by the big fund managers on BNN, I'm not impressed at all by years of experience. You're either good, bad, or mediocre. And like it or not, a lot of the task in getting clients is sales and networking ability. I never claimed to be humble, either. Anyway like I've said a number of times, attracting clients and the ability to manage money was not an issue in this thread.

EDIT @dmoney: Thanks for the post, I agree with you on a number of points. Perhaps an answer is to invest using our own capital and possibly a bit of borrowed money initially to establish a track record for the company. This is not so much because I'm worried about attracting clients, but moreso because I want to postpone the great time expense needed.
 

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I really don't think the people on here are trying to be debbie downers, we're just trying to help.

This forum isn't a bad place to start, but the reality is that most investors don't have a clue about the mechanics/qualifications behind what you are asking. I work in the industry and I really don't know either.

You might want to contact some regulatory bodies and ask them or read their websites to try to figure out what's going on.

One thing you could start doing, if you aren't already is establishing performance numbers. You need to have meticulous records (ie all trading activity etc) and use an established rate of return method.
 

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Well Argo, if nobody ever tried to succeed at what they want to do, I wouldn't have any companies to invest in. What you are trying to do is what I want to do with my life. I love investing, why not get paid to do it? I'm not likely going to start my own fund, maybe when I'm older and successful enough to put my name on a firm, but I don't see any problem with trying. Worst that will happen is you fail, right?

I try my best to do whatever people tell me I cannot. Which is most everything really. My parent are very anti risk. Which is pretty risky to me... they pretty much float along and trade each hour for a capped sum of money and then make that stretch as far as they can. Opportunities don't exist to them, because they choose not to acknowledge them. They might lose money, so they choose to continue having none.

My coworkers all think I'm insane because I invest in companies instead of real estate. I'm all for real estate if I can justify it. But I don't understand why someone would buy into a market that is essentially in bubble territory, as far as I can figure. I can't get a property cash flow positive, I'd have to leverage my self to my eyeballs and I would literally be trapped with this gigantic, illiquid asset as soon at the party is over.

I say go for it if it's what you want to do. I'd rather try and fail then sit there wondering if I could have succeeded.
 

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Discussion Starter #27
@Four Pillars: I love keeping meticulous records.. sometimes I open Excel for no particular reason but to look at numbers and pie charts. I had 31% last year, and sitting on 16.6% this year. I realize these numbers are harder to achieve the more capital you have, but the same principles apply. 2010 was a small sample size, but I did fine then too. I seem to do better in the bear (2011) than the bull though (2010, 2012).

@jcgd: Good post, you see where I'm coming from then. How old are you? Nothing is too young, really. I'm 25. Good luck to you.
 

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there has to be something going around these days.

jcgd only an hour ago was the 5th in as many weeks. "I love investing, why not get paid to do it?" he says, meanwhile admitting he has zero investment experience.

why not indeed. If we're hiring wealth managers for love alone, why not hire JustAGuy. At least with Guy, bankruptcy will be swift & merciful.

here's No. 4 in wannabe portfolio management. This poster hasn't even started an undergraduate major in finance yet, but somehow he believes that mr & mrs JQ Public are panting to hand their life savings over to him.

http://canadianmoneyforum.com/showt...people-s-money?p=144892&viewfull=1#post144892
 

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Discussion Starter #29
Years of investing experience is something, but it's not everything. Case in point: All of the doobs on BNN. How on earth Brian Acker has clients I'll never know. Him and his magical "model price", and his average performance of about -30% on past picks. For me, investing the money will be the easy part, that is my skillset. My friend has the sales and networking skillset. I suspect I'll be the one to manage the legality and the hoop-jumping, so that's what I need to learn.
 

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... attracting clients and the ability to manage money was not an issue in this thread.
attracting clients and the ability to manage money are the *only* issues in this thread.

all this bumph about logistics is pixie dust tossed up to obscure the fact that there will be no clients because there is not yet any adequate track record in managing 3rd party money.

two-and-a-half amateur years are not a track record. Insulting established money managers on 2nd rate TV programs is not a track record.

it's tragic, i know, but a wannabe does have to work *in* the industry for a number of years to earn his schmeck. It's even better when he's a good team player who doesn't brag, boast or antagonize potential future clients. At 25, the wannabe should not be sneering that he's been there, done that, doan wanna work for Da Man no mo'.
 

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But Humble, why is it such a big deal to you that we have directions we want to head with our lives and want to learn the path to get there? This is a forum for investors, and who said we have to be strickly DIY to be here? Does it not seem likely that interested kids like me come to an investing forum to learn, talk, discover about something we enjoy and are hoping to turn into a career? Not everyone necessarily wants to be picking stocks for a multi billion dollar firm. Maybe some of us just want to be advisors workin' down the street at Scotiabank.

Argo didn't say he wanted to do this tomorrow. I didn't say I want to do it tomorrow. Skyfall didn't say they want to do it tomorrow. So maybe we have 32 years to find out if we will ever even get there, but we need to start now and know what the hypothetical process would be.

I feel it's completely within my right to have direction, goals and dreams. Same goes for everyone else.

Sorry to be off topic.
 

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If anyone has the qualifications for this question it would be archer-maybe he will tell you how he went about it....He would be the expert around here.
 

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You don't want your salesguy friend to pitch your fund like the average stockhouse pumper and dump'er or ShamWow guy. He needs the right background. A few years as a fund analyst/pm/trader can help you get the connections you need... you'll have to go back to school for that.. Can your enroll into an MFE program next year? Things aren't how they used to be when George Soros started his career selling souvenirs...

Oh yeah, where is archerETF?
 

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But Humble, why is it such a big deal to you that we have directions we want to head with our lives and want to learn the path to get there? This is a forum for investors, and who said we have to be strickly DIY to be here? Does it not seem likely that interested kids like me come to an investing forum to learn, talk, discover about something we enjoy and are hoping to turn into a career? Not everyone necessarily wants to be picking stocks for a multi billion dollar firm. Maybe some of us just want to be advisors workin' down the street at Scotiabank.

Argo didn't say he wanted to do this tomorrow. I didn't say I want to do it tomorrow. Skyfall didn't say they want to do it tomorrow. So maybe we have 32 years to find out if we will ever even get there, but we need to start now and know what the hypothetical process would be.

I feel it's completely within my right to have direction, goals and dreams. Same goes for everyone else.

Sorry to be off topic.

to me this message seems totally on topic.

but it isn't what the OP is saying.

OP says he wants to leap to the summit of discretionary portfolio management - other people's money handed over with fiduciary strings attached that he's not willing to understand - without any training or preparation.

he doesn't want to work for a multi-billion dollar firm because, at 25, he's already too good for that gig. No, he just wants people to give him, oh, about 10 or 20 million $$ so he can play with it.

it's like a hospital orderly suddenly says he wants to do neurosurgery without going to medical school.

returning once again to your hopes & plans, they seem very reasonable. It's clear that you intend a steady learning pace. There's no megalomania, everything looks orderly & logical. I sincerely hope you will have a happy learning experience & i wish you the greatest good fortune.
 

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Discussion Starter #35
I didn't say I wanted $10 or $20 million, I said that it would have to be at that point where it would be worth it for a full time job. But you are right in that I do not wish to be under anyone. It's the American in me; just do it and take control. Learn from it. Time is money and the grave is a place to rest.

Some other good posts are emerging upthread. I like it. And I like the idea of listening to archerETF, maybe I will PM him. As of now here is the initial plan:

1. Start a business and pool equal amounts of money with my friend.
2. Open a free business account at ING, and a brokerage account at IB.
3. Manage this initial pool of money as a starter account.

This won't take much time off my regular day as I look at investing related stuff all the time. Wouldn't change much in respect with how I manage my own money either. Once I figure out the how-to's on managing other people's money (this could be a while depending on our current jobs) we'll go from there. I'm discussing it now with my friend and we're excited about it.

@ddkay: My friend isn't a pumper, but he is a salesman. Has great numbers as an advisor for TD, a young upstart like me.
 

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2 of the most successful hedge funds of the last decade were Scion Capital and Cornwall capital.

Cornwall was started by two 30 year olds in 2003 with $110,000 and a Schwab account, they turned that $110,000 into a 9 figure portfolio within 5 years.

Scion Capital was started by Dr. Michael Burry shortly after finishing his residency. Although he had no professional money management experience, Dr. Burry was able to raise significant funds after getting noticed for his stock picking ability on an online forum (sound familiar)?

Warren Buffett literally knocked on his neighbors doors in Omaha, Nebraska to raise funds for his first partnerships.

I wish luck to any entrepreneur, young or old, who has the strength and determination to go out on their own.
 

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Hmmm. Do people really not know this? OK. The licenses to manage OPM (other peoples' money) are all held by dealers in Canada. Thus, you need a dealer to sponsor your license, and you will need to do a compliance / conduct and practices course (and pass it) before you can obtain a license (held by a dealer), and then complete what is essentially a probationary period.

Now, there are lots of different ways to get a dealer to hold your license, depending (in part) on what kind of license you want to hold. And there are lots of different "models" for the relationship between the dealer and the advisor -- independent (and varying definitions of what that means), employee, MFDA, IIROC.

If you want to do discretionary money management that is another whole different ball game and layer of licensing and documented experience in the industry. Specifically, you need the CIM (Chartered Investment Manager) license.

None of these things have anything to do with the CFA, CFP or any of the multitude of other optional designations advisors can get. If you want to manage money on behalf of other people, you need a stock and bond license (which also allows you to trade in MFs), or a MF license (which restricts you to MFs), and you need a dealer to sponsor and "hold" your license, and you need to meet the dealer's internal requirements for compliance, conduct and practice. That is it.
What if you structure it as a joint venture/partnership, and only solicit funds from accredited investors? Would you need any of the above qualifications?
 

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argo you say your portf is up 16.6% year-to-date ?

i almost never check mine because i prefer the net worth approach. But out of curiosity i added up the portf itself. In 2012 i'm up 29.03% ytd, including gains plus dividends.

am i boasting how great my skills are ? No. Planning to bust into the hedge business ? No. Thinking to sell my services for 1% fee ? Never, got many other things to do.

i am wondering where these cocky brats with 2 puny years market experience are coming from. We're commencing the 4th year of a powerful bull market. A rising tide buoys all boats. The brats have never known anything different. They've never even lived through a market collapse. In just 30 short months, they've convinced themselves that they are wunderkind. They are invincible.

as it happens, i belong to the statistic that ambitious wealth managers are always wanting to court as clients. Nothing could turn me off more, about a potential professional manager, than the kind of swollen cheek from beardless babes that's being thrown around in this thread.
 

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I find this thread interesting. No snide comments or useful advice from me.

Just an observation how things have changed. There have been multiple threads lately about this subject.

But I used to think all the people with this type of interest wanted to go work for Goldman Sachs. Maybe the internet and all the technological advances and access to brokerages have made Wall Street obsolete. Or maybe it is all those protests.

If Goldman Sachs runs the show, wouldn't it still be better to work for them?
 

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Argo - At this point, I would say go forward with it. What's the worst thing that can happen? You learn a lot more about the investment industry and maybe you get some kind of career change out of it eventually.
 
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