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In addition to the items mentioned above, Rusty always has us working on a
side project…or three…
Posted by: Bryan P. Keller
Monday, February 5, 2007 | 8:52 AM | Permalink | Comments (0) | TrackBack (0)
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And they’re off!
The markets have officially opened.
A great source of information for the research department here is a proprietary
tool we have called Kobren Research Library (KRL). More details on KRL later
on.
The long-term investors that we are here at Kobren, we don’t necessarily
follow the minute-to-minute market activity as some investment management shops
may. That said, I do like to keep an eye on the markets throughout the day,
especially some of the stocks that the funds in my coverage group own.
One of the many tools I use to keep track of what’s moving the markets
are blogs (like this one!). These blogs sites are run by some of the best and
brightest Wall Street professionals. In having such a large pool of information
to reference, I try to balance my readings to include those that are bullish
(positive on the market) and bearish (negative on the market).
Here are some of the sights I check on a regular basis:
Posted by: Bryan P. Keller
Monday, February 5, 2007 | 9:33 AM | Permalink | Comments (0) | TrackBack (0)
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Monday Morning Research Meeting
Each Monday at 11:00am, the entire Kobren Research team comes together for
a weekly research meeting. I’ve provided an outline of our weekly agenda
below.
Depending on the major items of the week, we’ll devote more or less
time to certain topics. One of my main responsibilities in preparing for this
meeting is finding out why the funds within my coverage groups either out-performed,
or under-performed the markets in the prior week.
One of the tools I use more than any other in preparation for this meeting
is a proprietary tool we call “FISH” (Fund Information by Style
and Holding). This is just one of the many tools developed here in the laboratories
of Kobren Insight Management by KIM Research Analyst, Ben King, our residential
quant and tech wiz. In summary, this tool gives us an attribution report (performance
drivers) for all the funds we cover on both a security and sector based level.
So instead of referencing multiple sources just to find out why a fund out-performed/under-performed
its peer group last week, all we have to do is look it up in FISH. Thanks Ben!
Here’s a summary of our weekly agenda:
- Performance Review
- Each analyst reviews the fund performances of their specific peer group (ex;
large- cap value, small-cap growth, municipal bonds, alternative investments,
etc.) and presents this information to the entire team, as well as what drove
that performance (oil prices, earnings releases, economic data, etc.)
- Rusty Vanneman, CFA, Research Director, discusses the performance figures
for all of KIM’s investment products
- Chris Keith, Vice President
of Fixed Income, provides us all with a macro
economic and fixed income overview, and the details of what’s driving
- What’s New?
- This time also gives us research analysts an opportunity to talk about some
of the projects we’re working on
- News at major investment firms (such as Fidelity)
- Corporate developments at E*Trade
- Recap of past weeks fund manager meetings & conference calls
-
Who did we talk with?
- What did we learn?
- Pros and Cons of the fund
- Weekly Outlook
-
What’s going on this week?
- What fund managers are we talking with?
- Conference call schedule
- Important upcoming meetings
Last Friday, Vadim Levin, who covers the alternative investment mutual fund
category with me, met with an alternative fund manager in their offices outside
of Boston. He’ll be providing us with an update today on how his meeting
went.
Posted by: Bryan P. Keller
Monday, February 5, 2007 | 10:27 AM | Permalink | Comments (0) | TrackBack
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Kobren Research Library (KRL)
You’ve probably heard the term, “two minds together are better
than one.” If that’s the case – and I believe it is – then
imagine what eight minds (Eric’s and the research team’s) can do!
The Kobren Research Library (KRL) is an internal website that our research
staff uses to ‘post’ information to throughout the day. This information
includes the following:
- Fund reports
- Internal mutual fund analysis
- Internal research studies
- Conference call notes
- Fund literature/commentary
- Economic analysis
- Important contact information
- Market related articles
- Important e-mails
- And much more!
Here’s a mind-blowing stat: Since KRL’s inception last May, there
have been over 7,500 posts made. That’s more then 750 posts per month
over the past 10 months! In addition, we’ve been able to catalog all
of our old research to include in this system, which brings the total amount
of information at our fingertips to over 17,000 items!
I just read an interesting post by Jeff
DeMaso on KRL talking about how experts
are saying that the first human being that will live to be 150 years old is
alive today, and is probably in his early 50’s. That’s amazing.
One thought comes to mind when hearing that: people are going to need to save
a lot more for retirement! Lots of other implications in that one too.
Oh, and before I get a barrage of emails from clients asking me how they can
get access to KRL – Sorry, it’s for internal uses only!
Posted by: Bryan P. Keller
Monday, February 5, 2007 | 12:18 PM | Permalink | Comments (0) | TrackBack
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Fund Manager - Direct Call
A quick note before I hop on this direct call with a large-cap value fund
manager based out of New York …
One of the things we pride ourselves with here at KIM is the access we have
to mutual fund managers. We track our fund management interaction (using KRL)
very closely – at last check, we have interacted with over 90 fund managers
through interviews, direct meetings and conference calls dealing with specific
mutual funds so far this year. We like to shoot for over 600 per year, which
we’ve done for the past five years.
Just for kicks, if I had a one-on-one meeting with a fund manager, and was
only able to ask him three questions, they would be:
- Tell me about your stock selection and portfolio construction processes.
- Are you personally invested in the fund?
- In terms of compensation, what performance measures/benchmarks are in place
for the managers and analysts on the fund?
There’s plenty more information I’d want, but those rank highest
in my opinion. That said, if you asked another KIM analyst what their top three
questions are, I wouldn’t be surprised if you got a different answer.
In addition to the answers directly related to the questions, there’s
lots of other information you can glean from how a manager answers those questions.
Posted by: Bryan P. Keller
Monday, February 5, 2007 | 1:23 PM | Permalink | Comments (0) | TrackBack (0)
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Sector Meeting
It’s already 2:00pm?!
I really enjoy these sector meetings. Each of the research analysts are assigned
two economic sectors (telecommunications, healthcare, energy, etc.) to follow.
In addition to keeping track of the news and companies that are moving those
specific areas of the market, each of us also maintain a ‘portfolio’ of
five stocks in each of our respective sectors. I cover healthcare and financials
(therefore have two sector portfolios, with five stocks in each).
Though we’re not stock pickers by profession, it is interesting to follow
these sectors and stocks and discuss them within our group. Rachel
Zibrak,
who heads the meeting, likes to grill each us of with questions about what’s
been driving our sectors. I think she takes special joy in interrogating our
Director of Research, Rusty Vanneman, about his Media sector stock picks…a
little bit of payback I guess!
We focus much of our time here on the mutual fund industry, so it can be easy
to lose site of what’s happening in the markets. But by forcing ourselves
to stay up to date with the various factors affecting the stock market, we’re
digging deeper into the economic sectors and stocks that move the market. We
feel that it helps us be better fund analysts, giving us some exposure to the
decisions and factors that mutual fund managers use in analyzing their portfolios.
Fifteen minutes until the Sector Meeting. Time to put on my portfolio manager
cap.
Posted by: Bryan P. Keller
Monday, February 5, 2007 | 2:18 PM | Permalink | Comments (0) | TrackBack (0)
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The Conference Call Parade
The conference call ‘parade’ usually starts around 3:00pm. Depending
on the time of year, it can be insanely busy (quarter/year end), or just….well,
busy. Being on conference calls from 2:00pm to 5:00pm isn’t all that
unusual.
Some conference calls are better then others, and even though they only provide
us with limited direct dialogue with the fund manager (including Q&A),
it does provide us with an opportunity to assess their abilities.
The top-notch fund managers talk about their portfolios and stocks like it’s
their childhood pet! If a client questions a PM about portfolio construction,
or poor performance numbers or missed opportunities, these PMs acknowledge
the client’s concern, but insist that, over the long-term, they have
developed a proven method for generating market beating returns. Talk about
conviction and staying the course!
One of the more impressive calls I’ve been on recently is of a large-cap
deep value fund manager who has had less then stellar performance over the
past 18 months. That said, you’d never know it by just listening to him
speak. Over the long term, this fund manager has produced top tier returns.
But, as he puts it, “the markets just aren’t agreeing with me these
days”. That he’s able to admit to being off the mark in recent
months, yet refrain from chasing the hot trend while sticking to his long term
investment principles, is prime trait to have in your fund manager.
While we listen to these calls, we’re taking notes which are then posted
to KRL and can be reviewed later. Most often, we’ve either spoken with
these fund managers or listened to their conference calls before. In these
cases, we’re most intently looking for changes in their investment process,
portfolio construction or investment outlook.
Posted by: Bryan P. Keller
Monday, February 5, 2007 | 3:33 PM | Permalink | Comments (0) | TrackBack (0)
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Round Up & Research Portfolios
Time to start wrapping things up for the day.
Now, you may be thinking to yourself, “I’m sure these KIM analysts
don’t do these exact items every single day”.
In all honestly, even though today’s agenda was pretty packed, it’s
a good snapshot of a “day in the life”. Realize, also, that every
so often we’re out on the road meeting fund managers, spending a day
in New York City at seminars, or having fund managers visit us in our offices
here in Wellesley Hills, MA.
Another major monthly responsibility that we prepare for every month is our
Monthly Research Portfolio Meetings. Each KIM Analyst is assigned a mutual
fund coverage category – for example, I cover Large-Value, Mid-Cap and
Alternative Investment Funds. Each analyst maintains a portfolio of mutual
funds within our respective category. The average Research Portfolio (RP) contains
anywhere from six to eleven funds that we track against their respective peer
groups. Analysts must develop and maintain a well diversified portfolio using
considerations such as sector weights, median market caps, expense ratios,
turnover and a whole host of other factors.
The analysts are free to change the fund holdings in their RPs, but must provide
rationale to the rest of the group when doing so. I recently just had to let
go (regretfully) of a fund in my Large-Value RP due to the fact that it is
now classified as a Large-Blend fund. When researching for its replacement,
I utilized a proprietary KIM screening tool called the “I-Score” (again,
developed by Ben King). This gives me a good starting list for a deeper analysis.
We track the performance of each of our Research Portfolios against the average
performance of the respective category. I’d brag about my own year to
date numbers, but I don’t want to jinx myself!
And putting on my compliance hat for a moment, let me remind you that, of
course, past performance does not indicate future performance!
Posted by: Bryan P. Keller
Monday, February 5, 2007 | 5:07 PM | Permalink | Comments (0) | TrackBack (0)
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Signing off…
Well, I’m heading out – I hope you’ve enjoyed my ‘Day
in the Life’ blog. I had a blast doing it.
One of the keystones of the blogging phenomenon is the reader feedback and
interaction. Have today’s posts sparked any questions? Was anything mentioned
today that you are interested in learning more about? I'd love to hear your
thoughts, so send me an email with your comments
Thanks for reading!
Posted by: Bryan P. Keller
Monday, February 5, 2007 | 5:42 PM | Permalink | Comments (0) | TrackBack (0)
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As many of you know, a new medium of communication and information distribution
has taken the internet by storm. This medium is known as “blogging”.
If you’re not familiar with this term, blogs can best be described as
an individual’s personal diary, published on the internet for everyone
to see. These are “user-generated” websites where entries are made
in a journalistic format, and topics can and do include anything from baking
cookies to investing in stocks, and everything in between.
