Where are my assets held?

This question is often asked of us during our initial meetings. The investment assets and any other monies are held by a discount brokerage firm in your name or the name of a trust or company. The firm acts as custodian. Pallas Athena will have trading authority but not power of attorney. As such, the safekeeping of the assets and access to the assets is kept separate from anyone but yourself. Each month, the custodian will report to you all of the activities and values of your investments.  

How can a small firm compete with large firms that have vast resources in research? 

Investing is really an intellectual exercise. The use of modern technology has made information ubiquitous. Too much information imperfectly digested is more of a problem than lack of information. What is usually lacking is a strong theoretical understanding of how theory and practice interact. In the professional world this has led to an overemphasis on quantitative modeling. Sophisticated investing is much more than the size of a research staff or its physical location. True sophistication comes when qualitative factors are melded together with quantitative ones in such a way that TIME is your friend and not your enemy. Pallas Athena has a cash flow/time approach that is neither widely used nor easily duplicated.  

How can a small firm compete with large firms that have vast resources in service? 

On the service side it is true that a very large firm may offer multiple services, while a small firm can offer only one. This advantage may not always be so advantageous. In investing it can be useful, especially if you have many assets, to be able to interact with the individuals who are actually doing the investing. In a large firm there are usually personal relationship managers who service clients. Their mandate is to gather assets for the firm. Usually their expertise is more on the marketing than on the investment side. The investing is done at head office by individuals one never sees. And often the intermediary changes jobs and one is left to deal with a new personal relationship. Because the investing is done in a “black box” context, most portfolios are made up of various products and the stress is on short-term benchmarked performance. This leads to the tail wagging the dog where the tail is the performance and the dog is the investment. A more sensible approach is to remember that consistent performance that is not particularly lucky or risky is a component of value not value itself. As for the one stop service model – while it seems convenient, it is usually better to have independent professionals, who specialize and whom you know, working for you. 

Do you specialize in certain types of investing? 

It is impossible to be all things to all people. It is better to try to be the right choice for some people. Many people see investing as a way of making a small sum of money grow into a large sum quickly. They see investing as a substitute for work. In this context investing is really speculating. We do not try to cater to those who put performance above safety. While it is true that some people have made a killing in the stock market, such people are rare because the amount of luck involved is very large. Over time, as all gambling houses know and common sense will tell you, the gambler will lose to the house. Our model is made to serve clients who already have acquired some wealth and are aware that it is not easy to protect it and grow it at the same time. In religion we think of a Creator that is also a Preserver. In investing the goal should always be to preserve so that we can create