DIY Investing

I’m stingy and like to save money. So, there are a few jobs around the house I try to do on my own. Changing a light bulb (still) fits my skill set, but anything much beyond that is too close to the edge of my “circle of competence” in home repair.

So, I turn to professionals when I need to. They are not free, but they are accountable, competent and their results can be quantified and measured for value.

Some people I know have essentially hired themselves as their own investment manager. They might have a portfolio they have built over the years of mutual funds, stocks and bonds. This saves on fees. But do they track their own performance? And I wonder how much time are they able to spend researching their choices given the time obligations of both family and professional duties?

The goal as I see it in investing is not to focus only on fees but to maximize investment returns after the impact of fees and taxes.

A full-time investment adviser can offer his or her clients a full-time focus on their portfolio and goals. They also provide accountability as their performance results over the long run are quantifiable. But perhaps more importantly, an adviser can provide an outside perspective and guidance in times of market turbulence when it can be needed the most.

Proxy Voting (and Reading)

Proxy voting season is winding up around here at Triad. We invest in individual securities for our clients and vote proxies on their behalf.

We have arranged for each company to send us their materials the old-fashioned way, via mail, so we can read both the proxy statement as well as the annual report.

The proxy illuminates the relationship between pay and performance, and helps us to identify “owner-operator” situations where an executive’s compensation and ownership aligns their interest with that of shareholders.

We have seen a wide range of compensation arrangements, starting with one where an executive’s annual compensation was higher than the value of his ownership stake. The other end of the scale is represented by a leading online retailer that we follow. The CEO owns about 17% of the company but takes home a salary under $100,000.

Our investment process seeks to identify these types of “owner-operators”. We do this because incentives matter and there is no stronger incentive for most executives than their compensation package.

Our Top 1,000 Ideas…

ETFs have never been more popular (when someone is saying that about an investment, beware).

So, let’s look at what ETF investing is.

Investing in a portfolio of ETFs means you own very small proportions of potentially thousands of stocks. Why do you own certain stocks, and not other ones? Because they are part of an index that the ETF attempts to track. Good businesses and not so good ones. Cheap ones along with expensively valued ones.

We think that if we told a client we were going to buy them our 1,000 best ideas, he or she might start laughing.

So, we take a different approach. For stock portfolios, we seek to buy a selected group of what we see as good businesses and we are careful about how much we pay for them. In our view, we end up with a diversified approach without overdoing it.

There are many ways to succeed at investing, but this approach makes the most sense to us.

About the CFA Designation

Triad’s portfolio managers are CFA charterholders.  But what goes into attaining this designation?

The Chartered Financial Analyst (CFA) designation is offered globally by CFA Institute.  The current requirements include 4 years of qualified work experience, completion of the CFA program (curriculum and three six-hour examinations), becoming a member of CFA Institute and adhering to the CFA Institute’s Code of Ethics and Standards of Professional Conduct.

The program is distinguished by its rigor and focus on ethics.  The program curriculum is based on a Candidate Body of Knowledge established by CFA Institute that covers asset valuation, ethics, financial reporting, economics, corporate finance, and portfolio management.  Exams are offered once per year (twice per year for the introductory Level I exam).  The exam and designation is truly global – the same test is administered to all candidates, whether they are in Los Angeles or Paris.  Every year, CFA charterholders must attest that they are upholding the Code of Ethics and Standards of Professional Conduct. 

The following description from The Economist dates back to 2005 but in our view provides a good summary:

The Chartered Financial Analyst (CFA) qualification is roughly equivalent to a specialised postgraduate finance degree, including a mixture of economics, ethics, law and accountancy. It is much liked by employers in financial services. Whereas there are tens of thousands of finance degrees available around the world, ranging from the excellent to the worthless, there is only one CFA, managed and examined by an American association of financial professionals, the CFA Institute. It used to be just an American qualification. But explosive growth…has made it, in effect, a global currency.

The Economist, February 26, 2005

To learn more about the CFA designation, visit


Tired of Turkey?

I don’t know anyone who doesn’t enjoy celebrating Thanksgiving – especially the food. Each year I look forward to piling my plate with turkey and gravy, mashed potatoes, stuffing, cranberry sauce, green bean casserole and let’s not forget the pie! But soon after the meal I find myself spread out on the couch ready for a nap. Was it my overindulgence – or is turkey the culprit?

Turkey is a good source of Tryptophan. According to WebMD, Tryptophan is needed for the body to produce serotonin. Serotonin is used to make melatonin, a hormone that helps to control sleep and wake cycles. As it turns out, turkey contains no more of the amino acid tryptophan than other kinds of poultry.


According to Elizabeth Somer, MA, RD, author of Eat Your Way to Happiness, it’s a myth that eating foods high in Tryptophan boosts brain levels of Tryptophan and therefore brain levels of serotonin.

Somer says that proteins like turkey, chicken, and fish, which are high in Tryptophan, require assistance from foods high in carbohydrates to affect serotonin levels. Eating turkey alone may not send you off to dreamland. But when combined with potatoes and biscuits and stuffing, dreamland is just around the corner.

So have your turkey, Somer says, because it will increase your store of Tryptophan in the body, but count on the carbs to help give you the mood boost and the restful sleep.

The Business of Halloween

Investing can be scary. But Halloween – not so much anymore.

According to the National Retail Federation, Halloween is the second largest commercial holiday after Christmas. Halloween retail spending is projected to be $8.4 billion in 2016, a new record. Holiday spending for 2016 is projected at $655.8 billion. So it still has a ways to go. But several more Halloween records are projected to be broken this year, including the number of people celebrating at 171 million that are spending approximately $82.93 each.

So why is Halloween such a growth industry? One reason is that Halloween is a very affordable holiday. It doesn’t cost as much as Christmas or Thanksgiving and is still lots of fun. In fact, around 16% dress up their pets.



More signs of growth – temporary Halloween stores are on the rise and other retailers have expanded their offerings for the October 31 celebration. Nightclubs, restaurants, bars, even cities (Salem, Massachusetts) are cashing in by hosting Halloween events.

So the next time you hear “trick or treat,” no need to run and hide. It’s actually great news for the economy. And lots of fun.


Pause: Autumn is in the Air

We love the chautumnanging of the seasons – especially summer to autumn – the slight crispness in the air, the leaves changing color, the mass proliferation of pumpkins and of course the return of football.

The transition from summer to autumn is also a great time to press the pause button and reflect on the beauty around us. Nature presents a dazzling spectacle this time of year, but how often do we notice? In our rush to get here and go there and achieve and accomplish when do we just pause and appreciate the complexity of a tree’s roots, the multitude of colors in the fallen leaves or the way a deeply-inhaled breath of fresh air is so invigorating.

Before winter’s grayness and shorter days set in, take a look around you. Go for a walk. Stare out the window. Rake up a few leaves. Relish the newness of the season before it is gone for another year.