Portfolio manager Cale Smith on investing, Spoke Funds®, and Islamorada in the Florida Keys.

Just a heads-up for any portfolio managers in the crowd…

Next Monday, May 16, from 4:00 to 5:00 EST, I’m going to be joining Zack Miller of Tradestreaming.com for a webinar called:

“From the ground up: How to build a successful money management firm.”

The pitch for it is below. Join us if you can, eh? Gonna be fun.

And please reserve your webinar seat at:
https://www3.gotomeeting.com/register/545041518

Is your investment practice what you want it to be?

Many professional investors have changed their business models over the past few years. Wirehouse brokers are breaking out and going independent. Many are choosing to start or join existing RIAs. Many others are creating their own hedge funds.

Everyone is looking for the right business model, the right structure for their investment business.

Cale Smith, founder of Islamorada Investment Management, believes he’s built a better investment business mousetrap.

Called Spoke Funds®, these structures solve some of the problems associated with mutual funds (underperformance, tax inefficiency) and hedge funds (compensation schemes masquerading as an asset class).

The Spoke Fund® structure aligns incentives by ensuring the investment manager invests most of his liquid net worth in the same portfolio he’s selling to investors.

In this webinar, you’ll learn:

- Why the existing vehicles for your business (mutual/hedge funds) are broken
- How Spoke Funds® solve these problems
- Why Spoke Funds® are perfect for managers who are value investors
- How they lower start-up costs and get into business faster
- How their transparency is attracting a new class of investor

Please join Zack Miller of Tradestreaming.com and Cale Smith of Islamorada Investment Management for a frank and open chat about the future of the investment management business.

Here’s that registration link one more time. And after registering you’ll receive a confirmation email with more detailed information on joining the webinar.

Thank you!

I’ve now got a new site up at SpokeFunds.com. It’s for portfolio managers wanting to learn more about Spoke Fund®.

It became pretty clear about the time I held that workshop down here this spring that Spoke Funds were an idea that had outgrown this blog. Quite a few portfolio managers have contacted me over the last few years about building a spoke fund, and I felt like I needed a new place to start getting into the weeds on some wonky things about spokes. This blog, however, is really geared towards the investors in my funds, and while they put up with a lot of my antics, they’d probably draw the line at, say, 1,000-word posts about the optimal threshold trade setting in an initial synchronization transaction on FOLIOfn. So, I created the SpokeFund.com site to geek out with other portfolio managers. It’s low-frills, as you’d expect from a cheapskate do-it-yourselfer, but it gets the job done. Check it out.

As much time as I spend obsessing about our portfolio companies and my own business, I’m a little embarrassed to admit that I don’t quite yet know where the Spoke Fund concept is going – only that the idea seems to be growing. That decision of where to take it next is not just up to me anymore, either, though, as a few new other Spoke Fund managers have recently arrived on the scene. I’ve got plenty of ideas where things could go, mind you, but I also really like my current business just as it is. So, for the time being, I plan to take it just like you might expect of someone on a tropical island…slow and not too seriously.

I’ve been really enjoying talking to other fund managers about it all the last few years. It doesn’t take a ton of my time – swapping emails about Spoke Funds can actually be a nice break from the usual routine – and the little I’ve been able to post so far seems to be legitimately helpful to folks. It’s also brought me into contact with a great group of peers, a point I can’t underscore enough. The new SpokeFund.com site will help continue all of that, and allow other voices to chime in, too.

Finally, after many fits and starts, I should mention that I have finally started writing an ebook about Spoke Funds®, too. It will be the definitive guide to launching and managing a Spoke Fund® on FOLIOfn, and it will be out as soon as it’s complete. So stay tuned for more on that on SpokeFund.com.

A video from future Spoke Fund® manager Dustin, who says:

I’m always looking for things I can add to the ‘mental file cabinet’. Thought you might find this one interesting. This helps explain why Spoke Funds and aligning your interests with investors works.

“People don’t buy what you do, they buy why you do it.”

My favorite was this quote:

“The goal is not to do business with anybody who needs what you have. The goal is to do business with people who believe what you believe.”

Enjoy.