An Introduction to Lumen Capital Management
This is part of an investment series planned later this year for clients. This is it's introduction:
Lumen Capital Management, LLC
Our Investment Process:
Introduction-(46 & 20 years):
Our Investment Process:
Introduction-(46 & 20 years):
Closely coinciding with my 46th birthday is my 20th anniversary managing money for clients. I’m still looking forward to years of locking horns with Mr. Market and hope like Warren Buffet to be coming to work well past the time when most of us like to retire. Two decades isn’t that long in the grand scheme of things but it is enough time to have given some thought on investing client’s money. This is a retrospective not an epitaph and I’d originally envisioned a condensed 2-3 page summary on my investment process. However, the scope of what needs to be covered made that impossible. I’m a believer in the old phrase “the shortest story is the best story” so I will send instead a series of shorter investment articles. For speed and convenience an outline of this article’s main points is also highlighted in blue. Red is used for emphasis as well.
The investment management business has a very long apprenticeship, perhaps longer than any other occupation. I’m going to pass along what I think are the most important lessons I’ve learned from its school of hard knocks. The most important take-away I’ve learned under the market’s tutelage is that although change today occurs faster than ever, certain financial themes return time and again: Markets crash (1987 & 89), wars (Iraq, Kuwait, Panama, Kosovo) occur and tragedies like 9/11/01 happen. Substitute Ivan Boesky for Ken Lay, and you realize that corporate scandals and accounting shenanigans recycle themselves with depressing familiarity. Politicians interfere with the markets when they shouldn’t and ignore them when they should interfere. Bullish markets cycle into bearish periods and then back.
In my opinion you need to see several market cycles before you finally develop strategies and tactics for market survival. Basically you need the market to treat you like a king and then beat you up (time and time again) in order to recognize what you are up against. Education helps but you still need to experience how these financial themes mentioned above play themselves out. You can for example read up on bear markets. Navigating your way through one has to be experienced. If you’re still around after the weeding out process that it brings about, then you have learned a thing or two about investment risk and investment reward.
The investment process is a fusion of our market thesis and our battle plan. Since I’d demand to know how others would invest my money, I’m upfront with prospective clients about how I’ll manage theirs. Below is a basic outline of my firm’s investment process and it is roughly the order of my presentation.
The investment management business has a very long apprenticeship, perhaps longer than any other occupation. I’m going to pass along what I think are the most important lessons I’ve learned from its school of hard knocks. The most important take-away I’ve learned under the market’s tutelage is that although change today occurs faster than ever, certain financial themes return time and again: Markets crash (1987 & 89), wars (Iraq, Kuwait, Panama, Kosovo) occur and tragedies like 9/11/01 happen. Substitute Ivan Boesky for Ken Lay, and you realize that corporate scandals and accounting shenanigans recycle themselves with depressing familiarity. Politicians interfere with the markets when they shouldn’t and ignore them when they should interfere. Bullish markets cycle into bearish periods and then back.
In my opinion you need to see several market cycles before you finally develop strategies and tactics for market survival. Basically you need the market to treat you like a king and then beat you up (time and time again) in order to recognize what you are up against. Education helps but you still need to experience how these financial themes mentioned above play themselves out. You can for example read up on bear markets. Navigating your way through one has to be experienced. If you’re still around after the weeding out process that it brings about, then you have learned a thing or two about investment risk and investment reward.
The investment process is a fusion of our market thesis and our battle plan. Since I’d demand to know how others would invest my money, I’m upfront with prospective clients about how I’ll manage theirs. Below is a basic outline of my firm’s investment process and it is roughly the order of my presentation.
Investment Preparation
Discipline, Training and the Importance of a Battle Plan
Risk vs. Return
Investor Concerns & Investment Myths
The Client Matrix {A different way to look at the market}
Portfolio Construction
Diversification and Risk Practice
Use of ETF’s.
Investment Dynamics
Investment Thesis & Market Field Position
Fundamental Analysis
Valuation
Money Flow Analysis
Managing Positions
Exit Strategies & Losses.
posted by CR English at 4:33 PM
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