Monday 23 September 2013

Barry Ritholtz & The Big Picture

Logo, MMM, the new blog I follow

I have since two years back been reading The Big Picture Blog by Barry Ritholtz. He likes to have strong opinions about things, especially within economy and how bad the investment banks have been and how they have been sucking investors dry from money with large fees. In a way he has been speaking up for the little investor in the street. Which I felt that I belonged to. He has also been upset about how the 1% has been making more and more money in the US.

Now he and a fellow blogger that I do not follow have now created their own hedge-like fund where you can add in 1 million USD or more at only a fee of 1.25% per year for being able to take advantage of their excellent skills as investors.

Strangely enough (or is it not strange?) I felt betrayed by this move since the ones he were complaining on he has now joined himself. Did he only use his blog and his blog fame to get a foot into the "big" room to play with the big boys?

So for that reason I have decided to remove him from my blog list and I will add another well known American blogger called Mr. Money Mustache. His blog is more about life style and how you can save yourself to economical freedom. As he says if you can save 50% of your salary each month then you can reach financial independence in 17 years if you can save 75% then you can reach it in 7 years. So no matter what your salary is if you can adapt your life according to a certain level of spending then you can reach your independence. More expensive lifestyle, then more money is needed for being able to live on the capital gains. He also proclaims a healthy mixture of real estate, stocks, especially index funds and any other source of diversified income.

I like MMM so he is now added! Barry your out!


Ron Powell said...

This is factually wrong. I am a client of Barry and Josh's, so I know. It is NOT a hedge fund and I wouldn't go near them if it was. It is an RIA, a firm with a fiduciary rather than a "suitability" standard. They have a very reasonable fee structure and do not make $ off what they put you in, except where the value of your portfolio goes up, they make $ because of the annual fee, far less than the typical "2 & 20" charged by a hedge fund.

Get your facts right. You owe them a retraction.

Fredrik von Oberhausen said...

There is nothing wrong with a hedgefund. Why do you fear/hate hedgefunds?

Any fee over 0.5% are unacceptable according to my contrarian standards. So their 1.25% is completely unacceptable to me which you did not object on so that is true then? You also did not object on 1 million so that must then also be true both those things i got from reading his homepage.
Your objection seems to come from that i called it a hedgefund and that your never wanted to be in one. Which i do not understand... Still sorry Barry that i called it a hedgefund.

Either way... This betrayal i feel is not about what his fund looks like or if it is a hedgefund or private equity fund or whatever name you want to put on it.

The fact remains i no longer look upon him as one of the little guys and he sure as heck no longer represents me in any way. As you can see i have no million to give to your buddy Barry & Josh. And if i would have had then i would have gone to Pabrai instead. But first of all i would have handled it myself and not given money out for nothing...

Most new funds work very well the first five years so i am sure Barry will generate some good money for you.

Fredrik von Oberhausen said...

This morning I watched Yahoo finance and Barry Ritholtz was sitting there discussing the current crisis with running out of money on the 17th of October as well as the temporary shut down of some governmental sectors.

When directly asked how he himself was currently acting with the Ritholtz Wealth Management (the fund) he responded that he was sitting still in the boat but if it goes on for another two weeks then he would and I quote "...start looking into hedging."

Nothing wrong with that. He needs to secure the money of his investors such as you Ron Powell but please don´t tell me that Barry Ritholtz has not gone over to the other side of the fence and you now owe me a retraction for claiming that Barry Ritholtz and Josh is not running a hedge fund.

I will wait patiently.

@Ritholtz said...

Hedging is a tern of art, meaning "To protect a move in the opposite direction of a portfolio's holdings."

You can hedge by buying options, owning inverse funds, or just selling a holding.

We are not a hedge fund, we dont have minimums. As to our fees, we average below 1%. We are not the cheapest on the street, but we are competitive and include lots of services (like wealth planning) that most firms charge extra for.

I really have no idea WTF you are talking about -- apparently, neither do you.

Fredrik von Oberhausen said...

Hi Barry,

thanks for being a reader of my blogg Barry Ritholtz, I am glad to have you here.
Hopefully you can find some interesting European companies to invest in and pretty soon I guess Europe will start to look very attractive for you Americans.

Of course I know nothing, or better put, I have no gut feeling or old knowledge concerning different financial products and what they are which means I read every definition of everything before I decide to write something.

This now created a perfect moment for me to write a new article concerning this topic to clarify my point further. I will try to write and publish it sometime in January.
I will look forward to your comments to that one but please avoid the WT whatevers since that is so well known thatI consider it to be direct cursing and I prefer not to see that in comments so you got an exception this time.