Vol I, No. 3  

April 2013  



A monthly review for high net worth investors about how the quirks of human behavior 

drive investing...and what you can do about it



The Misbehaving Investor

About Us
Triad manages equity and balanced portfolios for high net worth individuals, foundations and retirement plans. The firm is 100% employee owned.  New relationships begin at $1 million. 

Founded in 2008, Triad has $117 million of assets under management as of 3/31/13.  The Equity composite return, annualized and net of fees, since inception is 12.6% vs. 5.6% for the S&P 500 Index  (4/30/08 to 3/31/13).

To learn more, just reply to this message or contact:

Dave Hutchison, CFA
Managing Director
(949) 679-3991

Notes to Performance

Please visit us at:

Nordstrom Rack

Nord Shirt

Today's newsletter introduces you to my sense of fashion (or lack thereof...) and finds a way to connect it to our philosophy of not overpaying for an investment, fashionable or not.

All the best,


John Feb 5    

John Heldman, CFA

Triad Investment Management

The Color Purple


No, I'm not referring to the 1985 Steven Spielberg movie starring Whoopi Goldberg and Oprah Winfrey...rather I'm thinking about my bedroom closet.  As I pondered which shirt to select one recent morning, it dawned on me that I own a larger than average selection of purple, fuchsia, magenta, violet, lavender and plum shirts...along with several shades of slightly odd green shirts (note that is not a picture of me below).  Not being very fashion conscious, it occurred to me that the accumulation of these slightly offbeat shirts has occurred as a result of my usual shopping choice over the years...Nordstrom...Nordstrom Rack that is.


Right about now you should be wondering "what does this have to do with investor behavior?"  Good question.  A decent dress shirt at Nordstrom will set you back anywhere from $100 to $200...while Nordstrom Rack has dress shirts for around $30 or $40.  Yes, at times the patterns and colors can be a little unusual-bargains are rarely popular, for if they were popular, they'd be sold...so when the funny color shirt-like the one I'm wearing now-sits unsold for a while at Nordstrom, it's eventually passed on to the bargain-basement Nordstrom Rack.  For me anyway, it wears the same, feels the same, and costs a whole lot less.


Unlike shirts, in the stock market the price you pay is a major factor in your ultimate satisfaction...what might be a great investment at $20 per share could be a complete disaster at $200 per share.  In fact, in many cases the price paid can be THE MOST IMPORTANT factor in investment success...and unlike a shirt, you can't return an overpriced stock.  Further, while an overpriced shirt won't hurt your financial situation, an overpriced investment can.


Fortunately, the stock market provides occasional opportunities to buy a $200 shirt for the equivalent of $30 or $40...you're buying a popular shirt at a very unpopular price...but the hard part is these periods usually occur when markets are depressed, and investors are frightened and unable to act decisively.  If you want to be a successful investor, consider buying when the world is treating stocks like the lonely purple, fuchsia or chartreuse shirts at Nordstrom Rack...unpopular, unloved and on-sale, despite actually being an expensive Armani or Burberry shirt. If you think and behave this way, you'll probably do well enough to spend lots of time at Nordstrom buying truly fancy shirts, if you desire. Or in my case, not.


Past performance is not a guarantee of future results.
Results are presented net of fees and include the reinvestment of all income.


2013 Triad Investment Management, LLC