Port Wren Capital, LLC
Finding Value InvestmentsSM
Top Financial Advisors - ETF - Growth vs. Value Returns
While reading a recent publication of a national financial newspaper, we noticed a particular article title that caught our attention. The title was “The Top 100 Financial Advisors.” Now please recall we are not financial advisors. We specialize in finding value investments via security analysis research.
With that said, one section within the article caught our eye, it went into great detail to bring light on a given advisors background. It highlighted her degrees, past employers all in the financial sectors. Including the likes of Lehman Brothers, Morgan Stanley and others. Plus, the total assets under management (AUM) of some $2.8B was given and her ranking among the ”Top 100.“ But what we found that was more note worthy in our mind was this statement, “… some of the Top 100 are beginning to embrace value style stocks – cheap, slower-growing names.” We were actually surprised to read this in a national business and financial weekly publication. Port Wren Capital, LLC have been seeing for the most part double digit ROI over the past six years and this article about the “Top 100” was telling its readers that only NOW these “Top 100” names advisors were just recently starting to use value investing strategies.
Not only that, later in the article appeared another statement saying, “Value stocks have underperformed momentum-driven names for years, but this year, they're looking a lot better.” Another statement we found very interesting and more so very confusing based upon our own performance figures over the past few years. Admittedly, some momentum stocks have done well. There is no argument with that specific statement. However, the bigger issue we have are in reference to these type of very broad-based over generalized comments that tend to mislead the readership.
Hopefully, the more informed, educated and experienced investors are able to see past these and avoid being pulled in these type of “trendy” articles. In addition, the article appeared to refer to various EFT funds as opposed to common stocks of individual firms. For example, “iShares S&P500 Value ETF (IVE) up 2.2%, while iShares S&P500 Growth ETF (IVW) is up just 0.45%.” They used these to point out how value style is performing better than growth. And that is all well and good. However, was it not the intent of the article based on its title to enlighten the reader to the “Top 100” advisors and how they were performing? Nowhere in the piece did we read what type of ROI the 40th ranked financial advisor has obtained currently or in the past over her about twenty year career, or of any of the advisors that the article addressed. At the end of the article they listed her with a score of 90,743 at the 40th position with the top person in first place who had a score of 100.000. Not knowing what those scores or value really meant. We saw an asterisk in the table to some very small eight point text that read, “the scoring system assigns a top score of 100 and rates the rest by comparing them with the top-ranked advisor.”
So there you have it. We still had no concept of how the rankings were determined or what the specific criteria was used to rank the individuals. Typically most investors want to know the ROI at the very least. After reading the article, with all the missing and misleading information, we can tell you that if we were individual retail investors, we would not rush out and seek any of these “Top 100” advisors based on this article. Port Wren Capital, LLC did not make this list this year and we will not make this list on any future years. Because technically, we are not “financial advisors”. And trust us we are fine with that. We will continue to search the U.S. stock market for undervalued opportunities, invest in them to increase our capital, and publish those same findings to our annual subscribers so they too can see long-term capital returns that are above average compared to many fund managers and non-managed funds like ETF's and Index funds.
We have disclosed some specific investment opportunities using security analysis research to find undervalued opportunities for our subscribers in our PWC STOCK REPORTSSM service. They have access to our security analysis pointing to specific undervalued companies with above-average return potential over the long-term.
At Port Wren Capital, LLC, we specialize in picking specific undervalued U.S. stocks using fundamental analysis developed by Benjamin Graham using a five step process. We have beaten the S&P500, DJIA and NASDAQ benchmarks since we started 5 years ago on our own investments. Discover the difference for yourself. To learn more contact us today.
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