Does your boss ever comment on your personal portfolio when you submit your brokerage statements periodically?

Got a bit of flack a few times cause I didn’t own any XYZ or XYZ2 stock (real tickers not revealed), both of which are major holdings at my company. No thanks, I’d rather minimize the correlation between my future bonus and my personal portfolio even though I’m pretty bullish on those 2 stocks.

What reason did your boss give for why you should own those stocks? It’s probably good to tell clients that the company employees hold the portfolio stocks (I assume you work in some fund). However, there’s a difference between company policy and the boss just being in your business.

To answer your question, no - nobody says anything about my personal holdings. My manager does not see these, although I think my compliance people might.

Compliance people see mine and manager has to approve every trade. Nobody has made any comment so far though. I would find it odd if they did, none of their business how bad or how good I’m doing.

Nope, I’m my own boss. My last boss used to front run my personal trades though, what a dick. I always hated submitting statements at the two previous firms I worked at, good or bad I always felt like it was none of their damn business.

Well, it is sort of their business to know if you are front running your clients. If I was the sophisticated type of investor who puts money in hedge funds, I would want to know that the manager is not putting on trades for the purpose of running up positions in a different account.

However, actually telling you what to hold in your personal account seems like a bit much.

My boss wouldn’t dare as I would threaten to go to HR right away. Ask me about my sexual life, religion or anything else. Don’t you even try giving me your tainted recommendations on my personal portfolio.

This. They want to be able to advertise that employees eat their own cooking.

And you say that the boss have “given you some flack”. Is it just good natured ribbing, sheer curiosity (like “maybe this guy knows something we don’t, so we ought to ask”), or is a serious “suggestion”?

I make 2-3 trades in my personal portfolio every month, and I have to submit my trades through compliance/legal because my fund monitors that stuff pretty seriously. These are pretty marginal transactions. Most of my time is best spent doing a great job for the fund and making sure my high-conviction calls get sized up appropriately, because of how I am incentivized. So yeah, I don’t do much trading in my P.A. not because I can’t, but because I don’t want it to become a distraction from my real job.

Also, it strikes me as silly that someone at your company would say something snarky about how you don’t own something that the company owns. Most funds actually have compliance policies that make it more onerous for you to own something that the fund also owns. Sounds like the guy giving you “flack” was having a slow day, and probably is a complete losercool

Agreed, but they should be eating their own cooking by investing in the HF itself, not by investing in the same stocks in their P.A.

^I almost wrote that, but since I’ve never worked outside of retail, I don’t know if a lot of firms allow small positions.

If OP works at LTCM, is does he get the opportunity to DCA into their fund in $50 increments every month? (Obviously this is an exaggeration, but the point should be understood.)

I believe the LTCM people were invested in their own fund. That’s why all those guys had large personal losses when the fund collapsed.

Back when I worked in fund, we were prohibited from owning anything we traded or had on the watch list. Some of the thinly traded tickers would see a lift in vol/price due to our little fund. Frontrunning would have been very profitable if it was attempted. The old compliance witch would scour our statements and deny any security trade reqeust of which we had an interest in anytime in the last 60 days. This included ETFs if we wanted a leveraged position. Basically I traded mutual funds during the hayday of my CFA’in in asset management.

Look at it this way. If your firm owns a security, the CFA even says the client must sell first, then the firm’s holdings, then your personal holdings. If the security takes a poop and falls off of a cliff, you’ll be last in line to throw up a sell order and save your shit, I mean shirt.

^ Your firm and client doesn’t care about whether your last in line. They want you to “get in line” and believe in what you’re selling to them.

I file a form every quarter detailing that I once again had no qualifying transactions in my personal portfolio. Just embrace the poverty and you never have these problems.

My also boss handles the compliance

Boss: Hey blackomen, I reviewed your brokerage statements… how come you have no XYZ or XYZ2? You know you can buy those if you trade after the fund.

Me: Oh, I ddin’t know that (I acutally know but don’t really want to be too correlated with the fund performance… kinda like how a pension fund doesn’t want to be correlated with its sponsor… but I didn’t mention that of course.)

Boss: You’d be lucky to get 10-15% returns with that portfolio of yours while the rest of us are making big money. Didn’t you learn a thing or two in the years you’ve been here? You’ll look back 10 years from now wishing you’d taken that risk.

(Note, I’m using a Boglehead-style passive portfolio with no individual stocks while many others at the firm buy individual stocks, including the stocks in the fund.)

^ Run a time series perofrmance return with your portfolio and the firms. I’d lay a steep bet you’d have similar return based on absolutely nothing. Every dipsht is doing well in this bull market over the past 4 years.

Your boss sounds like a zip.


Me: I couldn’t agree more. If I get 15% returns, I’ll consider myself extremely lucky.

My firm only lets me have brokerage accounts with a certain number of brokers. I think they monitor it that way on a firm-wide basis. My boss doesn’t see anything.

Ya, I realize this… and also it comes with a fraction of the volatility of picking risky stocks.