Goldman Sachs Invests in Motif Investing

I saw this really interesting article in the DealBook Section of the New York Times online:
Goldman Invests in Upstart Online Broker Primarily it goes into the investment Wall Street standard-bearer Goldman Sachs made into Motif Investing. This supports not only what I wrote in the previous post, that this is the democratization of the mutual fund industry, and even moreso that those in the know view it as the future of the mutual fund industry, or at the very least a promising direction for the industry's future. The article also gets into some of the startup's board members, which include former SEC Chairman Arthur Levitt. This fact bodes well for their legal sustainability. The final detail in the article goes to the sites plans for monetization for user-created funds, which I think is very strategically being referred to as a "royalty" structure: "In February, the company began allowing investors to create their own portfolios from scratch, and said those investors would eventually be eligible for royalties if others wanted to buy their themed portfolios."

Food for thought, no doubt.

The Democratization of the Mutual Fund Industry

While the verdict is still out on how Motif Investing (as described in the last two posts) will be, my preliminary assessment is that this could well be the democratization of the mutual fund industry. When I consider the possibility of putting together several Motifs, theme-based funds, with very little investment, let alone a promotional offer that covers trading expenses if you follow the promo's requirements, it looks like an opening to the world of diversified and informed fund investment for both the original fund creator such as myself and the retail investor.

Fund Update and Details on the $50 Promo Offer

At the end of this email, you can see the full "fine print" details of the $50 promotional offer mentioned in my last post. While I recommend you read it, and as you saw in my last post here, a very useful customer service email service@motifinvesting.com is provided should you have any questions for Motif Investing, I will lay out the main "fine print" stipulations now: to receive the $50, one must create a new account by following the directions in the email from me. If you did not receive this email inviting you to Motif, or even if you did get it but would like to get it again, please email me and request the Motif invite email at davidmoglen@hotmail.com. Within ten days of opening the new account, one must have it successfully funded with the $1000 minimum needed to qualify for the $50 promotional bonus, and the money must be left in the account for 45 days to keep the $50. After 45 days, if you no longer want an account, you can request a check or bank transfer for free for all the money back plus their free $50 at that point. The other key stipulations are these two: one, you must make at least one trade, and two, you must have cookies enabled in your browser settings.
To the first point, I would recommend buying a Motif, meaning either a fund I created or one of the many you can find with great themes (I will be giving my favorite Motifs -theme based funds- that they created in a post here in the near future) by clicking on search Motifs. The minimum investment is $250, so you could keep the other $750 of your $1000 account funding as cash in the account, and get your $250 investment, your initial cash remaining from what you put in to fund the account($1000-$250=) $750, and the $50 promotional cash all back if you wanted after leaving it in for at least 45 days. Of course, I would hope most people would look at this as a platform for long-term investments, but if people just want to cash out their free $50 ASAP then that is their right. Regarding the second point, cookies, I would recommend clicking on your browser options and make sure anything saying cookies is enabled, not disabled, because if they can not track the new account registration from you accepting the invite in my email (again, email me at davidmoglen@hotmail.com if you do not have this invite email) then they do not honor the promotional offer. You can always email their support at service@motifinvesting.com if you need any assistance making sure you've fulfilled their requirements on this promo.

I welcome everyone's input on topics such as ideal holdings in funds to be created in the future. I can tell you the top Motif themes that I plan to make are as follows (#1 is the one already created, as my invite email already mentioned):

1. Ultra High Dividend Fund
2. Ultra High Dividend Diversified Fund
3. Ultra High Dividend Focused Fund
4. Content is King Fund
5. Lagging the Rally Fund
6. Social Responsibility Fund

#1, also known as the "Don't Fight the Fed" Fund, is laid out in the fund description in the previous posting on this site. The Diversified version (#2) would take the same theme but add more holdings along the same criteria in each sub-category. This would be good for those who like the idea of the Ultra High Dividend Fund but are seeking a step change in terms of less risk and more diversity. Those who would like to move in the opposite direction might prefer (#3) the Focused version of the Ultra High Dividend Fund fund, as it would do the opposite of #2 and actually reduce the number of holdings, cutting away the more conservative dividend plays, and just going full-bore for the extremely high-yielding REITS, especially mortgage REITS, and even find some more of these further out on the risk-return spectrum to target even more enhanced yield within this sub-category.
#4 plays on the idea that Content is King, meaning firms such as CBS who make entertainment content are doing very well in this era when conventional and new digital and mobile channels are competing for their output. #5 describes a fund that would look for value stocks that have not participated much in the recent market runup, on the theory that they will catch up over time. My final idea at this time, #6, would assemble firms that had proven themselves responsible corporate citizens. To reiterate, I am seeking input on these or other investing ideas you may have, and when any new funds are created you will get the email like you did with #1, and if you did not get that invite email already please let me know at davidmoglen@hotmail.com.

Thanks and let me know if you have any questions.

THE FINE PRINT ON THE $50 PROMOTIONAL OFFER:
Invite your friends to Motif, and you'll both earn $50.





It's our way of saying thank you to you both.






Now, you can spread the word about Motif, and get rewarded for it. Here's how it works:




You invite a friend to join Motif--as many as you like.





Your friend opens a Motif trading account, and places a motif trade.





You'll receive a $50 Amazon gift certificate, and your friend will get $50 too.



It's a smart, easy way to do something nice for a friend - and for yourself. Invite your friends now.







See program details below for more information.















Contact Us
1-855-58-MOTIF (66843), 9am - 6pm ET, Mon - Fri
service@motifinvesting.com

Share








You will receive $50 for each friend you refer that opens a new Motif Investing non-retirement account, funds it with at least $1,000 and executes one motif trade. To ensure you receive the offer, each friend must use the link in your Motif invite via email or Facebook to open their accounts. The link creates a unique electronic cookie as an identifier. Therefore, your friend's cookie setting must be enabled. Your friend's new funds must be posted to their new account within 10 calendar days of account opening, and must remain in the account for 45 calendar days. Once your friend's first motif trade is executed, you and your friend will each receive a $50 credit to your Motif Investing non-retirement accounts -- or a $50 Amazon gift certificate via email if you, as the referrer, don't have a Motif Investing non-retirement account -- within 30 calendar days after the end of the 45-calendar-day period is complete.

For your referral to quality for the offer, you and your friend must not reside at the same address. Only one friend referral and $50 bonus per address is eligible. Your friend cannot be an existing Motif member or trading account holder.

Commission fees are not reimbursable as part of this offer. This offer is not valid for retirement accounts, such as IRAs, and cannot be combined with any other offers from Motif Investing, and is not transferrable. Limit one account bonus per referred household. Motif Investing reserves the right to terminate this offer at any time and to refuse or recover any promotion award if, in Motif Investing's sole opinion, it was obtained under wrongful or fraudulent circumstances, that inaccurate or incomplete information was provided in opening the account, or that any terms of the Account Agreement have been violated. This offer is not applicable to associates or affiliated associates (including contractors, interns, and temporary employees) of Motif Investing and their immediate family members. You and your friends must meet requirements for applying for, establishing, and maintaining a Motif Investing trading account in good standing, in order to participate. Offer valid for residents of the U.S. and must be at least 18 years of age to be eligible.

Standard pricing: $9.95 total commission per motif. Commission of $4.95 applies to any subsequent stock trade. Other fees may apply. For details on fees and commissions, please click here.

You've received this message because you've registered for Motif Investing. If you no longer wish to receive tips and offer emails from us, please update your email preferences.









P.O. Box 3548, Rancho Cordova, CA 95741© 2013 Motif Investing, Inc. All rights reserved. Member: FINRA / SIPC

The Ultra High-Dividend Fund

Hello Friends,

Would you like to see your savings grow, but are not sure how to get a well-advised portfolio for minimal cost? Are you tired of seeing your savings grow at a near-zero percent rate, and actually lose money when factoring in inflation every year? Several of you receiving this email have asked for my advice in the past, and I have been searching for some way to provide portfolio management services. Now, with the website www.motifinvesting.com, I have found an efficient method to offer my ideal portfolio allocations in the brand new Ultra High-Dividend Fund.

They currently are running a promotion where you can get $50 for opening an account, so you may want to consider getting in on that deal before starting your account. Also I’m getting great responses to all of my questions from their service team, so feel free to email them at service@motifinvesting.com if you have questions about how their site or promotions work.

There is no management fee whatsoever for any funds invested. I plan to provide more information, as well as this initial statement and the below fund description, at my new web site, www.ProgressiveEconomist.com, so feel free to email me with any questions and check in at my web site for updates.

Here is the Fund Description:

The Ultra High-Dividend Fund targets a range of promising securities providing an aggressive total return via dividends and capital gains. This fund features, at one end of the spectrum, companies such as REITs, Private Equity, and pipeline stocks which have proven their ability to pay nearly double-digit (and several above ten percent) dividend yields annually. At the other end of the spectrum, selections have more moderate yields of about four percent combined with greater potential for capital gains through their market leadership, long-term track records, and/or secular growth positioning. All of these yield-based selections are additionally screened for cash-rich balance sheets, mandatory current profitability, and inexpensiveness on price-earnings and price-book bases.

Additional Notes:

This could be described as a “Don’t Fight the Fed” portfolio. In other words, as long as economic conditions remain approximately as they are, this fund should continue to do well and far exceed the performance of the S&P 500. It currently has an overall effective dividend yield of an astounding 10.41% annually, which is paid into the cash account that you get when you register at www.motifinvesting.com. Remember, that annual dividend yield is not counting, but rather it is additional to, any appreciation in capital which is expected to occur for the stocks in this fund. If conditions do change such that I need to change the weightings, I will do so. In such an event, you would get the message from the investing site asking if you want to have my re-weightings copied in your fund, or keep the original weightings. I intend to make changes very rarely if at all, as doing so will incur a $9.95 fee I would have to pay, and, if you did adopt my weighting changes, you as an investor would have to pay that as well. So to reiterate, the allocations are set that such a re-weighting will most likely not need to occur for a period of at least close to two years, and keep in mind that you can always reject the re-weighting by not accepting the offer to replicate the changes, and avoid the fee.

Thank you for considering this investment option. I look forward to hearing any questions or comments you may have.

Sincerely,

David J. Moglen, MA

This letter can now be accessed directly by visiting ProgressiveEconomist.com. It will also continue to be accessible with the web site address you have used to get to to this web page today.

Letter to NewsMax: all the bank bailouts were Bush Bank Bailouts

Since my Letter to NewsMax, after seeing a misleading article was not accepted by their web site (it kept giving an error message) I will run their error correction task on this publicly:

Julie Cranshaw's reporting, and I fear this may be true of your entire staff, needs to be aware of the (I'll assume honest) mistake in her March 5, 2010 article "Soros: Obama's Bank Bailouts Were Big Mistake." As CBS has pointed out, more Americans incorrectly believe Obama did the bank bailouts, and don't know the fact that these were all BUSH BAILOUTS occurring in 2008. http://www.cbsnews.com/8301-503544_162-20013452-503544.html

And apparently your reporters also don't know that all the bank bailouts were Bush Bank Bailouts.

TARP, the nationalization of AIG, Fannie and Freddie, the Federally-backed takeovers of Bear Stearns, Merrill Lynch, and on and on, all of this was 100% under Bush. If you can find any bank bailouts under Obama, cite amounts disbursed that fall outside of the TARP program (signed by Bush into Law in 2008), and then compare whatever you can find - in my extensive research you will find virtually nothing - to the trillions the banks got under Bush. Most of this was Federal Reserve Programs, some of which continued under Obama but all of these were run autonomously by Bush appointee Bernanke.

The only Obama bailouts were the half of the Auto Bailout that hadn't already been committed by Bush prior to Obama becoming president and the vastly scaled back (albeit ill-conceived nonetheless) Public-Private Investment Program.

The ironic thing about Ms. Cranshaw's article is Soros, whose positions the article is all about, doesn't even call them Obama's bailouts. Your author inserts the additional erroneous information to mislead what Pew and CBS (see link above) proved is an already severely misinformed public on this very issue.

Open Letter to President Obama and Congressional Democrats

Feb 21, 2010

The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear President Obama,

Thank you for being one of the most important figures, and more importantly being among the most positive influences we’ve ever had. I hope I can assist you in becoming the most effective agent for a fairer future for a barely middle-class father like myself. As an Adjunct Economics Professor at several California Community College, I would like to share with you a partial overview of my progressive vision for 2010 and beyond.

MARKET POWER

As an economics professor, the biggest elephant in the room on the health care debate is that no one ever mentions the basic economic concept of market power. Count up the number of buyers and sellers; if there are very few sellers and oh, say, 300 million buyers, then the sellers have market power. If there are many sellers and a few buyers, better yet, one buyer, then the buyers have market power. Whoever has market power gets something closer to their preferred price (not to mention quantity). I’m disappointed this point hasn’t been made a central plank of the health care reform message.

So it is basic economic theory that medical costs will decline the closer we can get to single-payer. This is closely related to the useless waste of the entire private insurance industry’s existence. Every dollar of their money spent denying care, denying coverage, executive bonuses, marketing, and profits are a waste adding to over $400 billion per year. The many sellers should be those who have a role in the system: doctors, nurses, and hospitals – those who actually provide care, not someone who sits in an office trying to devise new ways to DQ Americans from receiving care.


FILIBUSTER

Clearly the filibuster is a roadblock. Everything should be done to abolish it at the start of the Congressional Session, as Joe Biden can request with a majority vote (you know, the way it’s supposed to work in the Constitution). In addition, a majority vote should be held now to lower the filibuster and require our esteemed Republican colleagues to read the phone book to delay things like unemployment benefits and health care.
I don’t know how many times one can use reconciliation, but if that’s the way to get the requisite national healing contained in hundreds of progressive policies passed with a majority vote, then please do everything you can to get Congress to use Reconciliation a dozen times per day for the next seven years.
In addition, and in the meantime as we wait for a return to majority rule, propose piecemeal legislation that really puts the GOP on the spot like unemployment extensions, and the key idea in the current health care reform, a mandated minimum care-payout ratio for insurers, the figure I’m usually hearing being around 80%.

BANKS

The biggest bank robbery in history took place under the Bush Administration (it was also the biggest Golden Parachute), and not just the Fed bank bailouts of non-transparent trillions spent, lent, or guaranteed. By the way, how much money is the Federal Reserve out for their involvement with the banks? Plus there’s the Treasury’s spending. I’ve heard much or all of this money is paid back, in the Fed and Treasury’s case. If that’s true, please let me know where I can see a summary of how all the trillions in lending facilities and other programs set up by the Fed under Bush has all been repaid, and the TARP has all been repaid. Have the $300+ billion in guarantees for Citibank/Citigroup been rescinded? For the toxic and other assets given to the Fed as swaps for cash, has the Fed gotten all that cash back and those assets back into the hands of the banks/ private sector? How can we really know this – isn’t that the type of thing some are asking for when they say the Fed should be audited/ more transparent?

I know a deeper crisis was averted, a crisis induced by worshipful adherence to laissez-faire purist free market ideology. A crisis that would have been lessened had Bear Stearns received the same Fed lending facilities their competitors immediately received. Adherents to deregulated idealized capitalism that ignores the presence of monopoly power and asymmetric information made many mistakes.

We should never pay for toxic assets. For the amount the Fed and Treasury have at times offered to pay banks for these poison derivatives, we could have paid off every single subprime mortgage in the country. And at this point I think that’s what we should have done. We definitely should have proposed (and still could) as Joseph Stiglitz did, that we have, not a “bad bank,” but a good bank, taking the private assets of value and leaving them to unload the toxic instruments they created.

I was told that my earlier letter against the PPIP (Public-Private Investment Program) was conveyed to you by a Stanford Professor who has or has had contacts with your Administration, Benham Tabrizi. I was relieved when it was announced that the program was to be downsized to 50 billion from the original 2 trillion (ProPublica.org reports it is down to 30 billion), and I hope it will be fully eliminated or rendered nearly impossible for banks to get any money for toxic assets. They are not toxic when foreclosures stabilize. The whole key is stabilizing the borrowers and the housing market. And if some instruments are so convoluted that they are still illiquid after housing has stabilized, it’s not the taxpayers’ problem. We should not spend one cent ever to try and detoxify toxic assets. Just worry about the underlying main street side, in this case, the troubled borrower of the predatory loan.


CORPORATIONS

Corporations are not people. Money is not speech. The laws that say otherwise should be reversed by legislation. Only complete public financing will restore to the American people their rightful voice in politics. Please aggressively support unions before their anemic counterweight to corporate power is totally eviscerated.

GUNS and CRIME

Focus for a moment on the right’s demand that we have a race to the bottom with state gun laws – the policy they want says: if you’re registered in the lowest-requirements state, you are legal in all 50 states. THEY HAVE A PLAN; right-wing anti-liberal and/or white supremacists will more easily transport guns, crime will go up, and they can blame you for the chaos that ensues.
Also many cities, in the midst of this terrible recession, have seen unexplained steep decreases in crime, murder, and violence. I think these need to get into White House regular talking points in some form. And I have not heard much to explain this yet, except, something about improved policing strategies. My hypothesis is so subversive and non-pc it might just be right: could the crime rates and murder rates be falling all over the country due to the Obama effect? Inner-city youths are inspired to achieve and seek mainstream livelihood, abandoning violence in droves, measurably soothing the long-festering wound of inner-city violence. I wish some friendly journalists could at least try this hypothesis. For heaven’s sake, Bush paid Armstrong Williams a quarter of a million dollars to print propaganda; the least we could do is give journalists a nudge.

IDEOLOGY

The GOP will continue to obstruct in every way they are allowed to do so. If the Democrats capitulate and declare the Republican minority the winners for the next few years, they will have rolled over and played dead the way Democrats usually do (see Florida 2000 –Gore’s attorney’s pathetic performance when the opposition invented case precedents – and Ohio 2004’s arguably worse multitude of voting and registration irregularities – capped by the censored from the media death of whistleblower and experienced pilot Michael Connell in a December 2008 plane crash) until the GOP officially does take power in the next elections.
Everyone who wants to represent people over corporations, and 99% of the people as opposed to the richest one percent, must push their side much more aggressively. I’d love to see you rattling off failings of the private sector and offsetting with things the state does well. For example:

- Private contractors in Pennsylvania bribed judges to systematically send children to harsh juvenile detention camps for minor infractions
- Wackenhut, now called GEO Group (always change the company name when embroiled in scandal, right?) has a long-documented history of just exemplifying horrid the privatized prison concept. Minimum wage teenaged guards with lower staffing ratios face increased riots and prisoner escapes when jailing is privatized.
- Blackwater, now called XE, forced the US military’s hand in Fallujah, massacred at Nissour Square and throughout Iraq, and a Blackwater guard committed point blank murder inside the green zone several Christmases ago, as usual to no punishment.
- A British company was caught providing coalition troops with useless “bomb detectors”
- KBR’s faulty wiring electrocuted US troops
- Multiple layers of private busing companies and subcontractors led to inaction during Katrina when it came to deploying emergency bus transit out of the city, as documented in Michael Eric Dyson’s book, “Come Hell or High Water”
- Companies that buy roads and highways in certain states have an array of strategies to hurt the drivers to benefit the company. By the way, these highway-buying firms are invariable not American companies.

We should collect, publish, and loudly publicize a running tally of the tremendous waste, fraud, and criminality private companies enact. We have an encyclopedia of everything that goes wrong when government uses private companies to do things it should do itself. Stake out a progressive angle, and when you get some type of outcome, push for an even more leftist position. Execute this pattern and repeat. This is what the right does so successfully and the Democrats just lay there dormant and ineffective, even when in total power with a loud mandate for action. The right stakes out a far-right position, they either get their way or some compromise, and then they stake out even more far-right positions.

I’m happy to contribute my ideas about policy, framing, messaging, and economics. Please translate your tremendous personage and the enflamed middleclass populism into unabashedly effective progressivism.



Sincerely,




David J. Moglen, MA