Ditching Wall Street

March 19, 2012
	The briefing was updated yesterday and can be found in The Briefing Room. Until last week, Greg Smith was a high ranking executive at Goldman Sachs, working in London.  According to  Forbes, Greg was witness to a business culture changing for the worse.  "To his great shock, he discovered an infection of virulent greed destroying a venerable culture of excellence, a culture that attracted him to Goldman with all the exuberance of his youthful talent and ambition.  But instead of making money - significant money - by making money for clients, he realized he was in a culture making money fromclients and not for them." (emphasis mine) Greg quit, wrote a powerful testimony, and many say will now be banished from Wall Street.  Goldman stock lost over 2 billion dollars of market value since Greg shared  his honesty.   GOOD FOR HIM!!  He could come and work for PivotPoint in a heart beat!  I am highly impressed with his character.  He finally let his conscience be his guide and did the right thing. Reading the multiple articles regarding Greg, I felt many parallels in my life.  Working with UBS as a Vice President and my partner being the branch manager (one of the larger branches in the country), I too was asked to "sell" investment products to our clients.  These  investment products were "packaged" with derivatives.  This means UBS would take normal investments and mix them together in a way that looked attractive to the clients.  In reality, the fees buried inside of these bundles of joy almost guaranteed the client wouldn't make money.  Even worse, our branch had a quota for the sales of these pieces of trash.  The clients that had them, hated them.  This was NOT an atmosphere of clean conscience.  As soon as my contract ran out, SO DID I.   The worse part, when the crap hit the fan, UBS got bailed out by those getting taken to the cleaners by their "packaged products".  The good ol' american tax payer. This leads me to an article I read this morning on Zero Hedge.  About half a trillion dollars have left mutual funds that invest in U.S. equities.  It appears that people are finally getting it, and realize that asset allocation and diversification don't truly reduce risk OR increase return.  Instead they are turning to actively managed investment strategies.    While 500 billion dollars has moved OUT of U.S. equity mutual funds, 700 billion has moved INTO Exchange Traded Funds,  which are very inexpensive, transparent and liquid. ( Amounts according to the 2011 Investment Company Factbook) .   My conclusion is that regular investors, like me and you, are getting tired of being called "Muppets" (a term Greg Smith said Goldman Execs would call their clients) and turning from the old ways of wall street to more transparent and efficient investment strategies geared to themselves than the brokers trying to sell them. Don has written another excellent brief this week.  Please visit the briefing to see our thoughts on what is next in the market and our plans to take advantage of it. Have a great day!! John Norquay CEO PivotPoint Advisors		In order to view the graphs and charts in our newsletter, please click the link at the top of your email to "always show images from PivotPoint Advisors" Resources Check out our Youtube Channel  Like our FaceBook FAN Page We manage money inside 401k plans. Know anyone who may want to use us? Click "Forward to a friend" (immediately below) to share this newsletter with friends you think may appreciate our services. Forward to a Friend Twitter Subscribe to the Weekly Briefing Report Unsubscribe Update Subscription Preferences View Email In Browser