Client Portals

Pursuing better3 min read

Oct 2, 2012 - John Osbon ( 5 mins to read)

Now and then a great business emerges because it does something no one else can through a breakthrough technology or discovery. But far more often, success comes to those who simply “do things better.” This may mean improving the auto engine to get more miles to the gallon, or providing faster turnaround on dry cleaning, creating a tastier coffee grind, or developing a smartphone that’s easier to use or drops fewer calls.

Small improvements can create huge advantages in business. And in investing as well. The relentless pursuit of better is at the heart of our business model at Osbon Capital.

What does better look like?

Some might say that better investing means picking hot stocks or timing the market to get in before a rally. But that’s not what we mean (we consider that lucky, not better). At Osbon Capital, better means:

  • Cutting costs to protect returns
  • Reducing taxes to keep more of profits
  • Carefully diversifying to reduce exposure to meltdowns in specific stocks or sectors
  • Optimizing each portfolio to maximize expected return for any given level of expected risk
  • Matching the portfolio to the specific goals and needs of the investor
  • Keeping track of progress through comprehensive, easy-to-decipher quarterly reports

When we review a portfolio for a prospective client (as we discussed last week) we look for every opportunity to make it better using the checklist above and Windham’s exceptional portfolio planning software.

Better in, better out

Better also means using high quality ingredients. We feel index ETFs provide the best opportunity to capture market level returns across many different asset classes while controlling costs and tax exposure. When building a client portfolio, we choose from about 60 such ETFs that we’ve carefully vetted, and we’re always looking for others that meet our stringent standards.

Making it better is not a one-and-done proposition. Think about where we’d be if Steve Jobs stopped striving for better in 2007. We’d be using first generation iPhones and using tablets made of paper. Better is an endless chase and always worth the effort.

Where better didn’t matter

This topic makes me think back to the day when I was a big deal in my own mind on Wall Street. I used to marvel at the myriad of investment options we presented to clients.  Capital preservation?  Here are six choices.  Income?  Try these three approaches.  Diversification, add four more alternatives.  And so on.  It seemed that if we couldn’t convince prospects with logic, we would dazzle them with variety.  If one tracked all those recommendations 10 years later to find out how they stacked up (no one ever did) you’d find some were pretty weak, some were good, and some were a little better.

I suspect that the pursuit of better got lost along the way on Wall Street, as leverage and bonuses created via other people’s money became too seductive. That lack of attention to better in the big firms had a lot to do with the creation of Osbon Capital. We love the challenge of better. It keeps us focused on what matters.

Can your portfolio be better?  Let’s have a look. Just drop us a line.


Postscript: Doing things better makes a big difference at all levels of investment. A few weeks ago (“How Massachusetts Invests”) we looked at the process used by the Massachusetts state pension fund, PRIM, which has done pretty well. Contrast that to Maryland, which according to this article has some of the highest expenses and weakest performance among the 50 states. Quoting the piece: “The administrators of Maryland’s pension systems would be wise to index the systems’ portfolios to ensure average investment returns,” write Hooke and Tasselmyer. “This would be a safer, more responsible use of system resources than paying Wall Street management firms millions of dollars each year to deliver sub-par results on public stocks and bonds and risky private alternative investments.”


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