Q:  I already have an advisor, why would I want to speak with you?

A:  Most of the people we work with either already have an advisor or a good handle on where our offering can potentially fit into their overall portfolio.  We do one thing, invest in stocks.  And those stocks should only make-up a portion of your portfolio.  Additionally, there is something to be said for not having all of your money invested with a single advisor.

Q:  I run my own business and invest in myself, why should I invest with you?

A:  While individual business owners can get a high return investing in themselves, at some point in their success they're going to want to lay off some of the risk of being 100% invested in one business.  Buying stocks is one way to invest in areas other than your own business.  We offer an alternative to investing that portion of your money in mutual funds.

Q:  The stock market is so unhealthy right now, it's not the best time for your services.

A:  This is analogous to saying, "My health isn't the best right now, why would I ever want to speak to a nutritionist?"  We think there's no better time to speak with us than when things aren't going so well in the stock market.

Q:  Why KIB and not an institution?

A:  That’s a great question that gets to the heart of why we started KIB. 

When you’re buying from an institution, you’re getting a service for the masses.  I don't care if it's mutual funds or restaurant chains, the results are the same; you CAN’T get top-of-the-line results with mass produced services. That’s why a recent study found that less than 1% of actively managed mutual funds outperform the market.

It doesn't matter how many analysts or "co-portfolio managers" a fund employs, I argue that a fund's performance is limited by the number of companies the lead portfolio manager can follow.  The more companies a fund has under its umbrella, the more the portfolio manager's talent is diluted.  In the case of the average mutual fund out there today, we're probably talking about 100 or more companies.   That's way too many.

Why do you think Warren Buffett, with his $200+ billion under management limits the number of companies in his portfolio to under 40?  I argue it's because he understands the limits of only investing in as many companies as he can keep on top of.

Q:  Okay, if I buy your argument about institutions putting out a mediocre service/product, why should I give you, Dan Kinkade, a portion of my equity portfolio?

A:  While we do have a different process than others, and I feel my credentials stack-up nicely against anyone’s, that's not where you'll find the answer.  You need to speak to me to get a feel for who I am as a person and an investor.  You can see the traits I possess that can't be taught or learned through experience.  You need to find out if those traits match-up with my investment process.  I believe after you speak to me you will have confidence in KIB.

Q:  You claim KIB's edge is in it's case-study approach to analyzing stocks/businesses and the people related to those businesses.  Let's say you can do what you say, what difference will this make in next quarter's performance?

A:  That's the wrong question.  We might come-in under or over next quarter's benchmark returns, that's the reality.  Even if we blow away next quarter's returns, or the quarter's after that, it could just be noise.  Maybe the few sectors we're in outperformed, maybe one of our stocks had a huge jump and pulled the portfolio with it, etc.

Do we expect to consistently do well with our choices?  Absolutely.  But, we pick a 'basket' of stocks for a reason.  It gives us some diversification, without diluting our analysis over countless companies.  We think this will keep consistent positive tremors running through our portfolio over time.  But can a quarter or two come where we overperform or underperform because a couple of our companies are getting thrown around by a manic-depressive market?  Again, absolutely.  I don't say this as a hedge, it's the reality.

I've seen a false sense of confidence, caused by market noise, make more portfolio managers do dangerous things than I've seen being made by insecure 'market battered' portfolio managers.  So you have to be just as aware of the inflated ego as you are of the one that's beaten down.  The two questions you should keep asking yourself are, "Does KIB's investment process continue to match what Dan said it would?", and, "Is this translating into long-term positive performance in my portfolio?".  Both equally important questions, one qualitative the other quantitative.