Each year, the SEC requires that we update our main regulatory filing, the ADV Part I.  This electronic document requires that we disclose pertinent information concerning our business to existing and prospective clients along with others who contemplate working with us in any capacity.  One of the questions on the form asks us to disclose whether or not we personally invest in the same securities which we buy for clients.  Each year, we check the "yes" box, but it would be helpful for me to elaborate.

I buy the same common stocks and fixed-income securities for myself that we buy for clients.  As we have discussed, our investment philosophy centers around the tenant that common stocks represent ownership interests in real businesses.  We buy and hold stocks in profitable companies at discounts to what our analysis suggests is the intrinsic value of that company.  We are confident in our research and believe that these companies will appreciate over time and represent sound investments. 

Similarly, I also buy the same fixed-income based Exchange Traded Funds (ETFs) that we buy for clients.  Our strategy is to buy ETFs that hold high-quality bonds that will preserve capital and provide a modest level of income.  The liquidity of the ETFs allows rebalancing without the trading costs associated with holding individual bonds. 

At the close of this post is a breakdown of my personal holdings by asset class and individual security.  These percentages represent aggregated values between a joint account with my wife, Moira, and our retirement accounts. 

Please note that our trading policy restricts us from "front running" clients when we buy or sell securities for our personal accounts.  Therefore, we do not buy securities for ourselves before purchasing large blocks for clients; nor do we sell personal holdings before making large scale changes in clients' accounts.  Unscrupulous managers have been known to engage in this practice which could produce substantial gains in illiquid securities.  

*This category (Other/LP) refers to my interest in a hedge fund, East Pier Capital LP, that Laidlaw Group manages.  East Pier Capital is a long/short fund that primarily invests in common stocks and also employs short-selling to take advantage of trading situations where the managers believe that stocks the market prices for certain stocks are too high and will fall in the near to medium term.