Views on Life & on Equity Investing

Wonder, Wealth & Abundance

Be the change

with 4 comments

Wishing you all a prosperous and Happy New Year.

At the same time I would like to apologise my fellow investors to whom I have not returned a phone call, since I do not like to discuss stocks. This is not to say I don’t have an open mind but I like to build conviction in isolation.

Change

My expectation from the likes of other mature investors who spend more than couple of hours a day is to promote a culture of partnerships in India. I expect the likes of @kudva, @rahul and others even more Senior in investing field than myself, and those who have been applying their mind and energy for years to open your own partnerships over coming months, years.

Other alternative discussed in Lynch’s book also is investment clubs where everyone pools money and there isn’t any controlling partner. I for one am not a good candidate for the latter.

Why ?

All PMS and Mutual Funds in India are charging 1 – 2 % fixed Management Fees. You would be doing a great service to retail investors, consequently society by wiping out intermediate charges. At the moment Management Fees (same as wholesalers charges from farm produce to retail shops) is charged irrespective of fact, whether their funds grew or shrunk.

No wonder Bufett has this bet http://www.longbets.org/362

2% extra compounding can make a huge difference in long term returns. Its an idea whose time has come.

Next logical institution / business idea

I am not aware of similar body in the West but once we do have a few number of partnerships working on model of no fixed Management Fees, either someone who is reading this or we could ourselves over the coming years form an institution of Association of Independent Partners thus giving you a corporate form, probably buy a joint insurance and have wider reach. My motto is to save retail investors from 2% cut of fixed management fees in PMS and Mutual Funds.

While I have no plans to relocate to India for the next couple of years to actively pursue this change, I hope to see atleast many more partnerships from you. I believe it has a bright future, Walmart’s success and Retail sector’s potential in India is for similar reasons and we are yet to see a revolution in financial sector by cutting off middlemen.

Written by amitdipsite

December 25, 2010 at 9:31 pm

Posted in Uncategorized

4 Responses

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  1. Its a great idea and although I have long been thinking about starting a partnership the legalities always seem to hold me back.But this is definitely on the agenda and since investment research gives me the most satisfaction i will pursue it sooner than later.

    kudva

    December 27, 2010 at 10:07 am

  2. I will do a write up of it for you and others for a partnership that can be kick started for friends and family members.

    SEBI registered Portfolio Management Scheme requires 2 Crore net worth/ bank balance and one need to give licence fee 5-10 lacs every couple of years. Or to start a Mutual Fund one requires 10 Crores and five years of profits.

    One can bypass the previous two methods and I will write up on how. It does require some cost and help of CA to have everything legalised.

    Its same as open source and proprietary software. There is room for both. And there is no way proprietary software can compete in certain aspects of free software. If we are 20 independent controlling partners, or investment clubs without controlling partners, doing this full time, there is no way Deutsche Bank or Citibank PMS can do better than us and keep sensors on stuff that matters. As a “Universe” partnerships will outperform Mutual Funds because we will work on Zero fixed expense from home and with time we should publish this in financial dailies eventually. But I believe even more important than that would be results where 1-2% difference becomes insignificant be it Mutual Fund or Partnership.

    Multibagger

    December 27, 2010 at 11:14 am

  3. Proline Fitness has a new website

    http://www.prolinefitness.in

    seems okay, more like Terminator movie inspired.

    Click on STRENGTH tab next to Weapons of Mass Destruction, quite a wide range.

    Multibagger

    December 27, 2010 at 11:40 am

  4. Yes it'd be extremely helpful if you do a write up.Thanks.

    kudva

    December 28, 2010 at 4:19 am


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