History
Before starting Marketocracy, Ken Kam was the CEO of Firsthand Funds, and the co-manager of what was then the top performing mutual fund in the country for the previous 5 years.
The thing that kept him awake at night was worrying about what to do when technology stocks eventually fell out of favor.
After all, nothing goes up forever. The stocks in the Firsthand Technology Value Fund had delivered an average annual return of 56% for 5 years. Nothing that rises that fast for that long can possibly be as good an investment at the end of the period as it was at the beginning. Nevertheless, it is usually at the end of a period of tremendous performance that assets rise sharply.
In the last year Ken was CEO of Firsthand Funds, assets rose from $1 billion to $8 billion, and he was worried that he was setting these new customers up for a big disappointment because he believed there was no way tech stocks could run 56% a year for another 5 years.
The best way he could think of to do well for these clients was to expand Firsthand's research capability so that they could transition out of tech stocks when it was called for. He made it his mission to recruit and manage the best investment team possible.
After trying to recruit portfolio managers and analysts in the traditional way, he concluded that reviewing resumes and conducting interviews was a poor way to do it.
He wanted to hire people who had superior track records. Yet, when he asked job candidates to show him their track record, he was surprised at how few people, even among the professionals, have a track record they can call their own.
The idea occurred to him that in an industry where performance is easily measured, a database of individual manager track records was the key to recruiting the best investment team in the industry. But that database did not exist. So he left Firsthand Funds and started Marketocracy to create that data base.
Before starting Marketocracy, Ken Kam was the CEO of Firsthand Funds, and the co-manager of what was then the top performing mutual fund in the country for the previous 5 years.
The thing that kept him awake at night was worrying about what to do when technology stocks eventually fell out of favor.
After all, nothing goes up forever. The stocks in the Firsthand Technology Value Fund had delivered an average annual return of 56% for 5 years. Nothing that rises that fast for that long can possibly be as good an investment at the end of the period as it was at the beginning. Nevertheless, it is usually at the end of a period of tremendous performance that assets rise sharply.
In the last year Ken was CEO of Firsthand Funds, assets rose from $1 billion to $8 billion, and he was worried that he was setting these new customers up for a big disappointment because he believed there was no way tech stocks could run 56% a year for another 5 years.
The best way he could think of to do well for these clients was to expand Firsthand's research capability so that they could transition out of tech stocks when it was called for. He made it his mission to recruit and manage the best investment team possible.
After trying to recruit portfolio managers and analysts in the traditional way, he concluded that reviewing resumes and conducting interviews was a poor way to do it.
He wanted to hire people who had superior track records. Yet, when he asked job candidates to show him their track record, he was surprised at how few people, even among the professionals, have a track record they can call their own.
The idea occurred to him that in an industry where performance is easily measured, a database of individual manager track records was the key to recruiting the best investment team in the industry. But that database did not exist. So he left Firsthand Funds and started Marketocracy to create that data base.