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      01-14-2017, 08:34 PM   #1
qba335i
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Ethics/compliance rules: personal trading

For all the people in the finance industry: what are your restrictions as far as personal trading?

I work in wealth management for one of the bigger firms and they just introduced a new set of rules that are totally unreasonable in my opinion...

- 60 day hold period
- no options/derivatives trades
- no short selling


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      01-14-2017, 08:40 PM   #2
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That sucks.
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      01-14-2017, 08:48 PM   #3
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Sounds bad, what's a short sell or derivative
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      01-14-2017, 08:48 PM   #4
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Lol
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      01-14-2017, 08:53 PM   #5
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I traded my baseball cards once for a look at some poon?
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      01-14-2017, 08:53 PM   #6
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Those rules are absolutely absurd.
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you're like, the cocaine godmother of BP.
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      01-14-2017, 09:14 PM   #7
qba335i
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Quote:
Originally Posted by 1MOREMOD View Post
Sounds bad, what's a short sell or derivative
See The Big Short movie
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      01-14-2017, 09:15 PM   #8
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Seen it. My reading comprehension is 3rd grade level not sure about viewing
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      01-14-2017, 09:35 PM   #9
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Do they fear it as insider trading and being able to leverage larger funds you manage to benefit yourself?
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      01-14-2017, 10:14 PM   #10
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Wow that's strick. We are encouraged to front run our personal trades before we pump-and-dump any stock. How are you guys expected to make a living? Sounds like a clever way of making you a slave. Don't worry, Trump will outlaw this kind of behavior.

In all seriousness, this is not entirely uncommon.
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      01-15-2017, 08:58 AM   #11
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I work for a trust company that has a large wealth management component and we have similar rules, but not quite that strict. No 60 day rule, and we can do options, but no naked puts/calls. We also have a lock out period for securities that are on our buy list. We also have to pre-clear transactions, but it's always same day.
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      01-15-2017, 02:53 PM   #12
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These rules will probably make your returns increase, if anything.

If hedge funds, personal investors, and portfolio managers followed those rules, 95% of them wouldn't continually under perform the market. These are facts. Long term, you will never beat the market and the things you're banned from doing are reasons why people don't beat it.

Buy stocks like you're buying businesses and hold them from decades.
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      01-15-2017, 03:03 PM   #13
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Quote:
Originally Posted by BayMoWe335 View Post
These rules will probably make your returns increase, if anything.

If hedge funds, personal investors, and portfolio managers followed those rules, 95% of them wouldn't continually under perform the market. These are facts. Long term, you will never beat the market and the things you're banned from doing are reasons why people don't beat it.

Buy stocks like you're buying businesses and hold them from decades.
Exactly. Time in market > timing market. A large majority of investors are their own worst enemies.

Last edited by other_evolved; 01-15-2017 at 03:16 PM..
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      01-15-2017, 06:00 PM   #14
qba335i
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Quote:
Originally Posted by BayMoWe335 View Post
These rules will probably make your returns increase, if anything.

If hedge funds, personal investors, and portfolio managers followed those rules, 95% of them wouldn't continually under perform the market. These are facts. Long term, you will never beat the market and the things you're banned from doing are reasons why people don't beat it.

Buy stocks like you're buying businesses and hold them from decades.
You always have to look at returns on a risk adjusted basis. There is more to it than a rate of return from one/single asset class.

Even if I were to agree with you, I can not hedge my current portfolio (increases risk) or benefit from tax loss harvesting (decreases returns on an after tax basis).

How do you define market? DJ30, S&500 or maybe a 60/40 portfolio?
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      01-15-2017, 08:49 PM   #15
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Why can't you benefit from loss harvesting? You should be doing that throughout the year.
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      01-15-2017, 10:17 PM   #16
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Quote:
Originally Posted by BayMoWe335 View Post
These rules will probably make your returns increase, if anything.

If hedge funds, personal investors, and portfolio managers followed those rules, 95% of them wouldn't continually under perform the market. These are facts. Long term, you will never beat the market and the things you're banned from doing are reasons why people don't beat it.

Buy stocks like you're buying businesses and hold them from decades.
Completely agree. Interestingly enough Warren Buffet is often touted as some prodigy of investing. His coveted class A Berkshire Hathaway share's performance is nearly identical to that of the S&P500, and this shouldn't be a surprise because it's essentially an S&P500-type mix that's slightly biased towards a small handful of companies (like Coca Cola, among others)
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      01-15-2017, 10:37 PM   #17
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Quote:
Originally Posted by NemesisX View Post
Completely agree. Interestingly enough Warren Buffet is often touted as some prodigy of investing. His coveted class A Berkshire Hathaway share's performance is nearly identical to that of the S&P500, and this shouldn't be a surprise because it's essentially an S&P500-type mix that's slightly biased towards a small handful of companies (like Coca Cola, among others)
Buffett built his reputation on his buffett partnerships and using insurance float to fund his acquisitions. These days it doesn't sound like he is making the headline investment decisions.
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      01-15-2017, 10:54 PM   #18
qba335i
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Quote:
Originally Posted by other_evolved View Post
Why can't you benefit from loss harvesting? You should be doing that throughout the year.
The tax loss harvesting requires 30 day holding and our new rule is 60 day holding period.

I can still do it, but can not do it as often as my holding period is extended.
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      01-16-2017, 10:08 AM   #19
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Quote:
Originally Posted by NemesisX View Post
Completely agree. Interestingly enough Warren Buffet is often touted as some prodigy of investing. His coveted class A Berkshire Hathaway share's performance is nearly identical to that of the S&P500, and this shouldn't be a surprise because it's essentially an S&P500-type mix that's slightly biased towards a small handful of companies (like Coca Cola, among others)
Buffett has nearly doubled the performance of the S&P.

http://www.berkshirehathaway.com/letters/2015ltr.pdf

Page 1
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      01-16-2017, 01:19 PM   #20
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Quote:
Originally Posted by BayMoWe335 View Post
Buffett has nearly doubled the performance of the S&P.

http://www.berkshirehathaway.com/letters/2015ltr.pdf

Page 1
Huh that's strange. Anyone know why there's a discrepancy between that document and what you'll calculate by hand if you open up stock charts for BRK-A versus S&P500?
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      01-17-2017, 11:23 AM   #21
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5 Day holding period

Can't touch a sector for a week, if we put a report out on it that day.

All trades have to be approved




Only rule that i don't like is the 5 day holding period, annoying as fuck. Cant imagine 60 days
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      01-17-2017, 01:53 PM   #22
BayMoWe335
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Quote:
Originally Posted by NemesisX View Post
Huh that's strange. Anyone know why there's a discrepancy between that document and what you'll calculate by hand if you open up stock charts for BRK-A versus S&P500?
Google is unreliable and I guarantee you Buffett's numbers are vetted. He's been including that with his quarterly earnings since 1965.

Plus, just think logically. Would Buffett be known as the greatest investor of all time if he just got market returns?
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