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Old 10-06-2016, 07:59 PM   #41
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The Johnson's investments in the article are Private Venture and Pre IPO meaning the average investor doesn't have access but the Fidelity public funds couldn't have access because the company umbrella already owned them.

"If F-Prime (Johnson) controls 5 percent or more of a private company’s voting stock, then that ownership prevents the Fidelity mutual funds from buying the same security before or during an IPO, according to the Investment Company Act of 1940. Fidelity told Reuters that it concurs with that reading of the law, which is enforced by the Securities and Exchange Commission."
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Old 10-06-2016, 08:13 PM   #42
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Originally Posted by ERD50 View Post
Life's not fair, get over it.

All we can do, as little people, is make the best choices that are available to us. If you stick with index type funds, none of this matters, I am very grateful that we have such low cost, diversified funds available. I'm no Pollyanna, but look at the bright side. We have outstanding choices available to us at very low costs.

That said, I do have a certain loyalty to Vanguard, as they are the ones who started down this path, and Fidelity has had to move towards it to compete. We all benefit.

-ERD50
+1

I w*rked around the fund industry for most of my career. What Fidelity supposedly did is much less egregious than many things I've personally witnessed.

If your costs of doing business reduces by an order of magnitude and you choose to charge the same; keeping the excessive profits for your Megacorp insurance company parent that's a first class problem. Sometimes companies pay hundreds of millions in fines, sometimes they pay zero.

Vanguard started competition and the rest of the industry had to follow. Technology did play a big part of the ability to reduce fees(images of documents are cheaper than handling paper), the net changed how fund companies interact with consumers. Bottom line competition is good expecially when most of the industry is still running on a good Ole boy mentally.
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Old 10-06-2016, 09:07 PM   #43
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I have an account with Fidelity and I like the Co., not planning any changes.

I don't care how rich the Johnson's are and hope they get even richer.

If they have done something illegal, by all means they should be prosecuted.

You lead the posse, I'm too old.
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Old 10-06-2016, 09:22 PM   #44
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I have an account with Fidelity and I like the Co., not planning any changes.

I don't care how rich the Johnson's are and hope they get even richer.

If they have done something illegal, by all means they should be prosecuted.

You lead the posse, I'm too old.
If you have any managed funds then they may be getting rich at your expense. Whether you care about that is up to you.
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Old 10-06-2016, 09:57 PM   #45
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I've never been a fan of Fidelity and here is another reason.
Just curious, what other Fidelity thorns are in your behind?
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Old 10-06-2016, 10:11 PM   #46
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Just curious, what other Fidelity thorns are in your behind?
lol, none other than I've listed. Conflict of interest and being sued by their own employees. That's enough for me.
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Old 10-06-2016, 10:17 PM   #47
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lol, none other than I've listed. Conflict of interest and being sued by their own employees. That's enough for me.
Of course then all traditional brokerages are full of conflicts of interest also, see the CDOs and the like they managed to push onto unsuspecting clients. And in many cases the financial advisors cared more about their personal pocketbooks than the clients. In particular the whole way the IPO market is structured is IMHO stupid and very old fashioned. Rather have a dutch auction where folks can bid what they like for shares (with perhaps a reserve price) and when the time comes go down an ordered list of bids until the stock is sold with the price being the bid for the final shares that filled the quota.
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Old 10-06-2016, 10:22 PM   #48
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Of course then all traditional brokerages are full of conflicts of interest also, see the CDOs and the like they managed to push onto unsuspecting clients. And in many cases the financial advisors cared more about their personal pocketbooks than the clients. In particular the whole way the IPO market is structured is IMHO stupid and very old fashioned. Rather have a dutch auction where folks can bid what they like for shares (with perhaps a reserve price) and when the time comes go down an ordered list of bids until the stock is sold with the price being the bid for the final shares that filled the quota.
Yeah, I don't do business with those people either.
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Old 10-07-2016, 07:00 AM   #49
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If you have any managed funds then they may be getting rich at your expense. Whether you care about that is up to you.
I have but one simple question. What managed fund isn't getting rich at their investor's expense? I mean, I think they (Fidelity, Vanguard, Schwab,.....etc) all are in it for the money, not for some altruistic reasons. If they didn't make money at my expense, then I don't think they would be around too much longer.

Using a single lawsuit and/or single conflict as a
reason to not use any given investment company, pretty soon, I'd have no place to invest. It is sad, but very true.

In full disclosure, I do have investments at Fidelity. Even considering the reported conflict of interest, it sure beats putting my money in the local bank savings accounts. If I thought I'd get a better treatment, better service or a better return somewhere else, I'd go there. YMMV.
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Old 10-07-2016, 07:07 AM   #50
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I have but one simple question. What managed fund isn't getting rich at their investor's expense? I mean, I think they (Fidelity, Vanguard, Schwab,.....etc) all are in it for the money, not for some altruistic reasons. If they didn't make money at my expense, then I don't think they would be around too much longer.
Not that they are perfect - far from it, but read up on Vanguard and how they differ from other investment companies:

Quote:
Founder John C. Bogle structured Vanguard as a client-owned* mutual fund company with no outside owners seeking profits.

This framework has enabled our leadership team and crew to put our clients first in all of our decisions and to continually lower investment costs. Our low costs have been an important factor in the consistently strong performance of our funds over time.

Vanguard’s structure remains unique in the industry. Today, we are widely recognized as a leader in low-cost investing and a steadfast advocate for the interests of all investors.
https://about.vanguard.com/what-sets...rship-matters/
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Old 10-07-2016, 08:26 AM   #51
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The Johnson's investments in the article are Private Venture and Pre IPO meaning the average investor doesn't have access but the Fidelity public funds couldn't have access because the company umbrella already owned them.

"If F-Prime (Johnson) controls 5 percent or more of a private company’s voting stock, then that ownership prevents the Fidelity mutual funds from buying the same security before or during an IPO, according to the Investment Company Act of 1940. Fidelity told Reuters that it concurs with that reading of the law, which is enforced by the Securities and Exchange Commission."
Much ado about nothing, so why did you post that link in the first place?
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Old 10-07-2016, 08:48 AM   #52
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Much ado about nothing, so why did you post that link in the first place?
Someone who has a axe to grind. Let's see the article says that no laws or ethics are broken.

So we don't forget how about fund companies that do break laws and ethics to the tune of 1.3 billion in fines.

https://en.m.wikipedia.org/wiki/2003_mutual_fund_scanda

There's many more of these types of issues that arise every year. Many are repeat offenders.

FWIW I've seen folks play with pre-ipo "investments" some made a lot of money. More lost a lot more money.
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Old 10-07-2016, 08:59 AM   #53
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Life's not fair, get over it.
In general mocking and spamming a topic isn't fair either. None of your posts cover the subject of the article.

The article focuses on company owners buying a pre-IPO stock, which then prohibits any Fidelity mutual fund from buying that same stock pre-IPO. If you own a total stock market fund, it eventually must buy the IPO.
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Old 10-07-2016, 09:17 AM   #54
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In general mocking and spamming a topic isn't fair either. None of your posts cover the subject of the article.

The article focuses on company owners buying a pre-IPO stock, which then prohibits any Fidelity mutual fund from buying that same stock pre-IPO. If you own a total stock market fund, it eventually must buy the IPO.
It's not mocking, it is serious. Life's not fair. Some people and groups have access to things that some of us don't.

Pick your battles. I see this as such a tiny issue, it's not even worth a passing comment.

As I said, the big index funds don't deal with IPOs, it's a non-issue. If that IPO eventually grows big enough to be bought by an index, I can't imagine that this initial transaction has any measurable impact at that point. Someone had to buy the IPO.

And it's not like every IPO results in a gain. It might be best for these high risks to be borne by someone outside their other funds. Can you show any evidence that Fidelity active managed funds (which can easily be avoided anyhow, just buy indexes) were measurably hurt by this? Do they under-perform their peers actively managed funds?

I'm with some other posters - much ado about nothing.


-ERD50
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Old 10-07-2016, 09:28 AM   #55
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Reasons not to like Fidelity

They changed my no annual fee Fidelity Visa and Amex cards from BofA backing to some other bank and changed the card numbers and forced me to change all my auto pays and raised the cash back. It was a real hassle, though they did manage to continue putting 2% of our spending in a Fidelity bank account on a regular basis. Their dull green cards aren't as flashy as other black or gold or silver cards.
Fidelity has been pretty boring - I keep forgetting to transfer the money built up in the Fidelity bank account so it just keeps growing. Think those are the only reasons they p*ss me off.
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Old 10-07-2016, 10:03 AM   #56
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One issue is that the Johnson family purchased them and that actively managed funds offered by fidelity could not because of the family fund purchase. Fidelity funds later purchased them at much higher prices when the Johnson fund sold them.
If this is true, it would be a serious charge. Were these sales made directly to the Fidelity Funds, or traded with others in close time relation to the Johnson sales?

Ha
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Old 10-07-2016, 10:09 AM   #57
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It's not mocking, it is serious. Life's not fair. Some people and groups have access to things that some of us don't.

Pick your battles. I see this as such a tiny issue, it's not even worth a passing comment.

As I said, the big index funds don't deal with IPOs, it's a non-issue. If that IPO eventually grows big enough to be bought by an index, I can't imagine that this initial transaction has any measurable impact at that point. Someone had to buy the IPO.

And it's not like every IPO results in a gain. It might be best for these high risks to be borne by someone outside their other funds. Can you show any evidence that Fidelity active managed funds (which can easily be avoided anyhow, just buy indexes) were measurably hurt by this? Do they under-perform their peers actively managed funds?

I'm with some other posters - much ado about nothing.


-ERD50
Pick your battles indeed.

This is clearly worth expending energy for the OP but, not so much for many others...including me. Seems the 'real' battles worthy of the effort are those listed in the link below.


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Someone who has a axe to grind. Let's see the article says that no laws or ethics are broken.

So we don't forget how about fund companies that do break laws and ethics to the tune of 1.3 billion in fines.


https://en.m.wikipedia.org/wiki/2003_mutual_fund_scanda

There's many more of these types of issues that arise every year. Many are repeat offenders.

FWIW I've seen folks play with pre-ipo "investments" some made a lot of money. More lost a lot more money.
I was thinking of a real life analogy that would illustrate where this is on the scale of importance for me because, that's how my funny mind works...

It's very much like I was walking down a major city street and saw a long line waiting behind the velvet ropes to get into the hottest new nightclub; up comes a small group (F-Prime) who cuts in line and is let past the ropes into the club. While I mentally note the inequity of that situation (some people get special treatment), I don't care one bit because, I'm on my way downtown the street to do something completely different, the nightclub has no effect on my activity and, the club is playing a style of music I don't care for anyway.

Meanwhile, down the street there are several gangs (convicted investment banks, et al from 2003) robbing pedestrians. Now that concerns me! But, thankfully, the authorities have discovered them and are making arrests, enabling me to enjoy my activity...End of Story.

Thanks for taking my little adventure with me.
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Old 10-08-2016, 05:25 AM   #58
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i use both vanguard and fidelity . i use fidelity about 90% and vanguard 10% .

i am much happier over all with fidelity . been with them almost 30 years .

following the actively managed fidelity insight models ever since 1987 the growth model out performed had i just bought an s&p index fund 10.81% vs 10.10% for the s&p after expenses .

i can't really compare the models to anything else that would be an apples to apples comparison .
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Old 10-08-2016, 10:01 AM   #59
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I think the biggest "crime" all mutual fund companies commit is how they vote the shares owned by the fund. Another of my many "it'll never happen" ideas, but we should be able to have the mutual fund vote shares based on an investor profile for how we want our proxy votes cast.

For instance, if I were voting my own shares, I'd never enhance executive compensation for people already making multiple millions per year. Those people might think they're doing a better job than anyone else in the world, but I bet hundreds of qualified people could do at least 99% as well (probably better) and be compensated at a rate of 10% of what the current executive is getting. Not only that, they would be very happy to do it, and not have their hand out for more.
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Old 10-08-2016, 10:27 AM   #60
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It's not mocking, it is serious. Life's not fair. Some people and groups have access to things that some of us don't.

Pick your battles. I see this as such a tiny issue, it's not even worth a passing comment.

As I said, the big index funds don't deal with IPOs, it's a non-issue. If that IPO eventually grows big enough to be bought by an index, I can't imagine that this initial transaction has any measurable impact at that point. Someone had to buy the IPO.

And it's not like every IPO results in a gain. It might be best for these high risks to be borne by someone outside their other funds. Can you show any evidence that Fidelity active managed funds (which can easily be avoided anyhow, just buy indexes) were measurably hurt by this? Do they under-perform their peers actively managed funds?

I'm with some other posters - much ado about nothing.


-ERD50
The article says nothing about our ability to buy IPOs. The article talks about how the large mutual funds at Fidelity are prohibited by law from buying - because the owners of Fidelity got their buy orders in first. Related companies can't overlap ownership, so the Johnson family is the only Fidelity shareholder that can own pre-IPO shares.

I'm not trying to measure the topic, just thought it deserved discussion. But almost nobody is talking about the topic introduced in the first post, and people who do are discouraged by people who supposedly couldn't care less - but post in the thread anyways.
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