Money Management Add On: Value Stock Guide Roadmap for 2016

This is a very brief note and many of the details have not been worked out. For now, I wanted to make my members and readers aware and when I have updates, I will post them.

Planning to add a money management facility on top of the Premium service

I have been in discussions with a few of my premium members for more than a year (more than 2 years with some) as they have asked me whether they can have me manage their investments for them. Similar questions have been asked of me by members of the local business community here in Michigan.

Conceptually, this will be a pooled fund, similar to Warren Buffett’s original partnerships. The fee structure will be performance based with very little to none fixed component. I have ideas in my mind around the numbers and percentages for this, but they are not formalized enough to put it on paper yet. The basic idea is that I get paid only if your returns exceed a certain threshold every year.

I expect this fund will be very private, only offered to my members and a few other people I know well. I do not have the exact timing of this yet but this is certainly something I want to get started in 2016. A down market is often times the best time to start a new investment fund.

I have thought about this long and deep and I do not want to turn this into a public hedge fund. This will be a very private fund for people I know well or who have been with me for sometime to understand how I invest. Very similar to how The Baupost Group excludes most of the investment dollars to focus on a few selected clients.

Am I soliciting investments in this?

Not really.

At this time I have sufficient interest expressed to be able to launch the fund with a good size capital. I am working through a few things before I am able to start the fund and I am targeting next year, likely the first half.If you are a member, you can express your interest. I will need to know you well first. Generally I have spoken to each member or otherwise interacted at one time or other. If we decide to work together on this, we will draw up all the relevant agreements, etc, when I open the fund/partnership for investment.

If you are not a member you may want to become one if you are interested. Click here [opens in new window/tab]

Of course, depending on your investment goals and situation, the current Premium membership will work as well or better than the planned fund. This fund will essentially have the same investments as the Value Stock Guide Premium but will of course differ in places due to the size of the capital considerations. The investment style will be the same. The fund will be able to take controlling interests in the companies if so desired.

This will Trigger the Following Changes in the Premium Membership for New Members

I have tried to keep the Premium membership exclusive, as frankly not everyone is cut out to be a value investor. It requires a lot of patience and discipline and trust in the investment thesis and the manager. With this new fund in the pipeline, I will dial up the exclusivity in the premium membership.

For now I have added back the Lifetime option as I want members who have a long term investment horizon. This is still at the old rate.

In the next few days or weeks, the Lifetime option will become considerably more expensive. This way I will be able to get the new members to self select themselves in terms of their investment goals, and amount of capital they are willing to deploy. Later if they decide to move into the fund, we can work out a partial credit to the fund fees based on the fees already paid (similar to what I have been doing for the Lifetime upgrades so far).

Finally, I will do away with the annual subscription option. In the light of the renewed focus on long term investment relationships and a value investment philosophy, the annual subscription option does not make sense to me. I have very few members left on the Annual plan now, most have upgraded to the Lifetime. If you are on Annual plan and want to upgrade, let me know in the next few days.

If you are already a member, nothing changes for you. Once the fund launches, new memberships in the Value Stock Guide Premium will no longer be offered.

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