You get what you Pay For

I rarely get bored.

That explains why I can sit all day and stay glued to the TV screen watching and listening to various “experts” spread their wisdom.

Today, though, as good as it was, turned out to be very boring.

For a change, not only was there no news to move the markets, but there weren’t even any rumors.

You get what you pay forTo make matters worse, even though I am a big fan of Ben Benanke, Federal Reserve Chairman, his press conference, which now can no longer be referred to as “unprecedented”, came to pre-empt CNBC’s “Street Signs,” which for me has been a reincarnation of the old NBC concept of “Must See TV.”

To put that into perspective, I felt the same way today as when episodes of COPS and America’s Most Wanted are pre-empted by NASCAR, except I don’t like NASCAR.

Instead of dealing with the boredom, I did something that I really dislike. I went to the Mall to pick up some more stylish accessories to complement my typical daily outfit, as I was making a business related day trip to Nashville on Thursday.

While driving there it was either pay attention to the road or think about anything else. So I chose anything else, but focused on the earlier thought this week regarding “expertise”, but now I was focused on “at what cost” should we bow to expertise?

Each day I seem to wonder why we don’t hear more people speaking out on the clear and constant assault on our intelligence.

Listening to the barrage of statements whose contradictory nature is masked by the passage of time, it would be nice to see the occasional use of that modern miracle to objectively measure expertise.

Video, or at least its digital counterpart.

These days nothing happens without someone having captured it on video of some sort.

Since I do nothing else in life these days than sit and watch, I maintain my intelligence by trying to recall everything I’ve heard and seen in the process. That includes the local cable advertisements for computer repair and pest control.

A rodent prancing on your motherboard will cause great damage, but at least I think I can remember where I put the piece of paper with the shop’s phone number on it.

But when memory is lagging, video is great.

 A number of years ago, Joe Kernen offered to drag out the video that he inferred would contradict the statements that an esteemed guest was making, regarding his personal exemplarly prediction track record. That individual was giving the strong impression that he had called for market caution just prior to the collapse of the markets. He was equally clearly upset with the suggestion that he was massaging the past.

So much so that he passed away not too long after.

Kernen will do that to people.

In that sense, I guess Kernen got the last laugh, although that was a bit extreme. The official party line is that the two events were unrelated, but the mysterious disappearance of the DNA evidence certainly leaves room to wonder.

There’s no question that there’s some very high priced talent out there willing to manage your assets and provide your portfolio tending loving guidance, while playing a revisionist version of history.

I don’t totally understand the “2 and 20” nor the concepts of “high water mark,” but I certainly understand the proven concept of closing a fund when losses make it improbable that the “2 and 20” will ever kick in. Doing that also erases all memory, other than for those that get left holding the bag with losses from the old fund.

Yet, amazingly, high priced losers always seem to live yet another day. There’s a whole other world of investors out there who likely are unaware of the real performance they are buying into.

Now that’s a nice concept. Walk away from your failures and start anew.

The unsaid, or more likely loudly stated concept is that “you get what you pay for.” That’s somewhere along the lines of “it takes money to make money”.

That appeals to lots of people. So much so that many mega-church pastors are able to convince their not terribly worthy parishioners that God will like them more if they donate more lavishly to the church.

Only then will they become more worthy, while in the process becoming less wealthy, which is a stopping point for becoming more wealthy.

Inferences being what they are, if you should lower your self-respect by paying less, you will get less. Like say, a lesser Hindu God.

Since there’s no equivalent measurement to Price – earnings ratio in the world of portfolio or hedge fund managers it’s really difficult to critically assess if you really do get what you pay for when your portfolio is managed.

 No doubt that there is truth to almost everything that’s said or left unsaid. After all, how many absolutes are there in life? Even the Ten Commandments have some wiggle room. Even those absolutes have back door escapes.

Don’t want to commit adultery? Fine, bigamy for you.

But I think I’m beginning to understand why we’re so accepting of such clear and blatant contradictions. In fact, they really don’t insult our intelligence, they help hone and maintain it. Besides, we’re surrounded by contradictions and never think twice about tehir co-existence in what should be a mutually exclusive relationship.

Beyond that, axiomatic sayings, the ones that we simply accept as being true, often have their own axiomatic, yet polar oposite counterparts.

“The best things in life are free.”

How does that even begin to square, especially when you get what you pay for?

With time, I’ve come to very strongly believe that the science of stock picking is neither art nor science.

It’s either blind luck or access to very special and timely information.

Given the ferocity of market moves and the rapidity with which they occur or change direction, it’s not terribly likely that anyone can really fare well by simply picking stocks. Obviously managing positions through the use of derivatives is increasingly important to manage risk, but that just further confirms that even the best and brightest have no clue what will happen to their favorite stock fromr one moment to the next.

So, do you really have to pay for the expertise that is every bit a hostage to external forces as you, a lonely individual investor is?

Clearly, when there are massive moves, it’s not legions of little guys who are creating or perpetuating the waves.

The little guys, though, are still to often led to believe that the deck is stacked against them. As such, the only way to have a fighting chance is to pay for it without regard to performance. There’s also much more prestige to having a managed account at Morgan Stanley than one at E*Trade.

That’s the suburban equivalent of class warfare and snobbery

Obviously, when all of the chips are ready to be cashed in, prestige has lots more cache than bottom line.

I bring all of this up because among the reasons I maintain this blog is to sell books. For that purpose, I have a publicist.

He is paid nothing and worth every cent.

Alright, I paid for his college education and may have fed him on occasion, but otherwise, he gets nothing.

Best of all, he has nothing to work with.

I’m anti-social, lazy, content to be sitting in my La-Z-Boy and watching TV.

In the meantime, I do find some time to make some trades. Today they were simple ones and not terribly rewarding as there’s only two days left until this week’s options expire. When you subtract what I pay my publicist for his services from the premiums I received today, I still have all of the premiums.

He has the memory of meals past.

After about 500 points of loss, today was a gift that allowed me to sell calls on Riverbed Technology, Netflix and Amazon.

I didn’t get much for the effort, but it was something that I could throw into the box that holds all of those other meaningless trades.

My publicist, in the meantime, was doing some real work. He’s informed me that I’ll be appearing on “Bloomberg Rewind” next week.

I was watching Bloomberg Rewind tonight and the guest, John Ryding, Chief Economist of RDQ Economics disparaged Twitter when asked if he participated in that social medium phenomenon. His position was that his clients expected more than what could be delivered in 140 spaces.

Newsflash: Clients don’t want verbosity. They want performance. They’re not paying premium fees because they want your wisdom in doses of greater than 140 spaces.

But still, all of a sudden, my publicist is earning his way. I hope he’s not expecting a little extra in his envelope.

But here’s the problem.

When you start getting more than what you paid for you can go one of two ways.

Either you congratulate yourself on the great fortune of faring so well, or you wonder “what if?”

For me, there’s no “what if?”

There’s nothing better than not needing to have your hand held and then topping it off with the hand you held for so long giving it back.

There’s no price on that. And I still have about 120 spaces left. Now that’s economical.