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kulman
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   Posted: 29/Oct/2006 at 9:09pm |
P.M.S.
Here are some observations about Portfolio Management Schemes (PMS) after recent interactions with a large number of investors, Traders & of course Mungerilals:
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Lately, there has been noticable increase in marketing pitch from telemarketers of large reputed Brokerages to their existing/new clients for subscribing to PMS.
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Even your old chum, Relationship Manager a.k.a. Dealer a.k.a Circuit might have mentioned about PMS or would have visited you personally along with an "expert advisor", a smartly dressed young guy (usually wears ties---and somehow design of their ties resemble the ones worn by star business TV Anchor).
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98.5% of these "expert PMS Advisors" have less than 15 months of "experience" in the market. They have however passed exams conducted by NCFM and possibly AMFI.
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46.5% of these "expert PMS Advisors" are either from BPO (call center) or Real Estate (plots/flats etc) Selling background.
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86.5% carry a laptop. During their presentation they would show you colourful & impressive ppt slides indicating the fund managers' out-performance during the past 3-4 years. they have also been well trained to make you feel "down" as they would tell you how some known HNIs (in your city) have multiplied wealth using this route.
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They'll quote about "different horses for different courses" theme while introducing various types of PMS....just hold your breath: Plain Vanilla, Aggressive, Active, Passive, Discretionary, Non-discretionary, Fundamental, Value, Growth, Value-cum-growth, Large Caps, Mid Caps, SMID-Caps, Arbitrage, Technical, Momentum, F&O, Hedged, Unhedged, Blue-Chips etc etc etc and so on....
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Usually they have criteria of some minimum amount, varies between 5-10 Lacs. If you express inability due to this, there is an option of putting your current demat holdings in & top up the balance cash. However, there is a catch: In all probability, their PMS Fund Manager would sell all your holdings to raise cash. And as such he may not agree with your investment argument for holding on to the same.
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PMS Fund Manager would keep on "churning" your portfolio. This helps you to be with winning scrips always! (actually it helps the Brokerage House...you know why & how).
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There are no guaranteed/promised returns (96.5% would not fail to mention that it is as per SEBI rules). However there will a certain "profit sharing" formula.
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72.5% of the people surveyed said that PMS shall mean: "Pyaar-se Maaro Scheme"!
Any views/comments/experiences from forum members?
Edited by kulman - 29/Oct/2006 at 9:10pm
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basant
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Posted: 30/Oct/2006 at 3:25pm |
Absolutely that is the way they approach you. SOme years back I used to contact all the PMS fellows to see what stocks they have bought into and they obliged me with past holding statements also had a few dinners at the TAJ as I was invited as a prospective catch  .
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BubbleVision
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Posted: 30/Oct/2006 at 3:59pm |
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Actually, the PMS guys want the money to trade on behalf of Costumer..... and their performance is the same as that of Ordinary index (or worse then that). They go up and down along with the markets. They add little value.
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You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer!
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kulman
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Posted: 30/Oct/2006 at 9:29pm |
It is no wonder then, why the Oracle from Omaha said this:
Full-time professionals in other fields, let's say dentists, bring a lot to the layman. But in aggregate, people get nothing for their money from professional money managers. ---- Warren Buffett
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basant
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Posted: 30/Oct/2006 at 9:42pm |
I got some free lunches (dinners) and that too without enrolling for the PMS. At that time the objective was to meet the fund manager who was doing the PMS and talk to him whether he was interested in retailing and media stocks.Never got a positive response. In fact I met one of those PMS agents (dalals) a few months back and he said "aapka share toh bahut achcha chala ab profit book kar ke PMS karwa lijiye". I smiled back and nodded saying I would think over it- after all I had taken their salt at the TAJ.
On a serious note all this PMS business is worse then a MF.
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kulman
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Posted: 30/Oct/2006 at 10:01pm |
Wah Basant jee
Aap ne Tata ke Taj hotel mein, Tata namak kha ke, Fund Manager ko tata kiya!!! Jawab nahin!!
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basant
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Posted: 30/Oct/2006 at 10:20pm |
Ha Ha Ha. That was good one but I have seen that most of these fund managers have this Zebra mentality. Look at the kind of cash positions these people were holding when the index was at 9000 levels.
The number of fund manager who have made ten baggers in this entire bull run is far less then what they ought to have given the scale of following they have. I am not saying that they are follish but that they they are not as intelligent as we perceive them to be.
Edited by basant - 30/Oct/2006 at 11:06pm
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kulman
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Posted: 30/Oct/2006 at 11:00pm |
I met two Mungerilals (one 23 years old & the other 43) this evening, both very happy & in jolly mood singing loudly following songs:
M-23 Years Old (immitating Himesh Reshamiya's nasal tone): "Oooooooooooooooooooooooooooooooooooo…..
Ooooooooooooooooooooooooooooooooooo………….
Ooooooooooooooooooo……..Oooooooooooooo………Huzoooooooooooorr……
13……..13…. 13……..Surooooooooooooooooorr !!!"
M-43 years old (trying to immitate the great Kishore-da): "Hey hey…haha…hmmmm... hmm…hmmm… Kora kagaz tha yeh man mera….likh liyaa naam is pe 13, 13, 13, 13……"
It took me some time to understand that they were celebrating 13K !!!
Edited by kulman - 30/Oct/2006 at 11:02pm
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