The story you are about to read is true. The names have been changed to protect the innocent. This is a real client.
When I first met Dennis in 2002, his career was going gangbusters, but his investments were a mess. Like most high-profile actors, entertainers, and sports icons, Dennis was constantly besieged by investment gurus who promised the moon but rarely delivered. Dennis was a ‘Mark” in the vernacular of investment hucksters and financial con men.
He usually agreed to take a meeting with anyone who had a good elevator pitch. He liked chasing shiny objects. And this was his Achilles Heel as an investor. Here’s how things usually went for him:
Some finance guy who had connections in the film business would wrangle a pitch meeting with Dennis so he could explain how his “system” or “strategy” could produce market-beating returns with half the risk of other approaches. The open-minded Dennis was easily influenced by these presentations, especially if they included a well-designed PowerPoint slide deck.
About half the time, Dennis would write a check to the pitchman and officially become an investor. The first thing I did as his consultant was to review the outcomes of every deal he invested in. At no surprise to me, the results were sub-par to put it mildly.
In addition to being an easy mark, Dennis was also an impatient investor. He rarely stuck with any strategy for more than 6 months, which meant that the few strategies that were legitimate and had real potential to make money were abandoned before they had a chance to take off.
If Dennis could just focus on two or three strategies and ignore the rest, he would have had a fighting chance at picking winners. And if he could just stick with these 2 or 3 strategies long enough to find out how they performed over time, he might have made some serious money on his investments.
Instead, he left a trail of failed investments behind him and never learned which of these strategies could have been right for him.
Here’s what I did to correct the situation and get him on the right track:
- I asked him to give me a few days to vet the reputation and performance record of any new pitchmen who wanted to meet with him. He agreed. I eliminated 80% of them.
- I asked him to come up with a short list of the investment objectives that were the most important to him.
- I asked him to prioritize these investment objectives.
- I asked him how much of his free time he wanted to devote to managing his investments- daily, weekly, monthly and yearly.
- I asked him to give me three estimates for what kind of returns he was looking to make on his investments - bare minimum, realistic, and optimistic.
- Then I asked him whether he was willing to risk his current state of financial security in order to become even wealthier.
- Our first few coaching sessions were a little contentious, because he wasn’t used to someone asking these hard questions.
- Over the course of our 3 year engagement, he hired, fired, and rehired me several times. I think he kept coming back to me because he recognized that I was giving him the unvarnished truth rather than trying to sell him a new shiny object.
- At the end of our engagement, Dennis was on solid ground with his investments. He began to appreciate the benefits of keeping things simple and easier to manage. Last we spoke, he told me he now spends far less time thinking about and stressing over his investments. I consider this case one of the most successful of my career.
How this case study relates to the Killer Portfolio course
All of the building blocks and step-by-step instructions that I used with Dennis are included in the online course. What isn’t included is the one-to-one discussions and email exchanges that took place during my consulting engagement with Dennis.
In a consulting engagement, I charge an hourly fee for the time I spend on each case. By taking the online course, you can bypass this feature and get down to the business at hand – building your portfolio.
If at any time you feel that you need some extra support, you can join our exclusive Facebook Group and interact with other course takers. Additionally, you can message me through the website, and I will provide the answers to your questions.
If there is enough demand, I will set up a group conference call where anyone can ask for help or guidance.
On internet there are a lot of portfolio sites with CARG, Sharpe ratios, BNCH, Max Drawdown, Correlation, Relative strength reader, Benchmark correlation, comparison and finally back testing of strategies. My questions are : Do I get something new ? What it is in that course what I do not know already ? I spend 10 years on modeling all kind of portfolios and all kind of strategies. Everything works until it does not. There is no holly grail. Over years I came to conclusion that investor has to use at least 4 strategies ( 4 portfolios ) and change them regarding economic conditions ( low rates, high rates, slow growth, inflation, etc. ). Only one strategy works all a time – Relative strength , but it takes a lot of time and it becomes trading. Need more info on Your product ! Thanks. Andy.
Thanks Andy, tomorrow I’m going to publish a more detailed description of the course. A few days after that, a sample chapter or two. That might answer some of your questions.
Regards,
Erik