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Cost Analysis

If you really want to know the extent of the hidden cost rip-off, check out the following list of fees and other expenses that weigh down your mutual fund contributions.

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List of extortions

1. Total costs. This item is always listed in large print in investment fund prospectuses because it is what they want you to focus on. But this is just the tip of the iceberg. According to Morningstar, the average cost of participation in US mutual funds is 1.31 percent of the investment volume. This includes management, operational, marketing, administrative, and mailing costs. Many large funds understand that announcing total costs of about 1 percent is a good bait for clients, and brokers tell them just that.

2. Transaction costs. This category covers a wide range of costs, which include brokerage commissions, market mechanism costs (caused by price fluctuations in the market when funds buy or sell large amounts of securities), and spread costs (caused by the difference between bid and ask prices, purchase and sale prices). A 2006 study by business school professors Roger Idelen, Richard Evans, and Gregory Kadlec found that transaction costs in American investment funds average 1.44 percent per year. This makes them perhaps the most significant expense item, but funds try to hide them and do not indicate them in their advertising brochures.

Many people enjoy the tax-free or tax-deferred benefits of a 401(k), but these are mostly offset by additional administrative costs, which average 1.13 percent per year, according to the Office of the Accountability Office! By comparison, if your investment account is taxable, your tax burden ranges from 1.0 percent to 1.2 percent, according to Morningstar.

4. Payment for using the “soft dollar” system in calculations. This system provides for a quid pro quo arrangement. Fund managers prefer to inflate the payment for trading services of attracted firms, so that they subsequently return part of the funds paid to the fund. This is a kind of incentive for using the services of specific companies, reminiscent of the airline mileage program. Due to this, the manager can use additional services, in particular research and information, for which he would otherwise have to pay himself. In this case, it turns out that you and I pay for them! This is just a well-disguised fund income. It is not reported anywhere, and it is almost impossible to determine its value, so we do not include it in our calculations, but the fact that these costs are present is beyond doubt.

5. Fee for withdrawal of funds from the account. Investment funds require a certain amount of cash to provide liquidity for day-to-day operations and to be able to pay out clients leaving the fund. If the amount of cash decreases, the fund's income decreases. As a result, funds charge clients withdrawal fees that have averaged 0.83 percent per year over the past ten years, according to research by William O'Reilly and Michael Prisano. These costs are not considered direct commission expenses, but they do reduce your income.

6. Fund exit fee. If you decide to stop using the fund's services, you will be charged a fee, which, according to the Securities and Exchange Commission, should not exceed 2 percent. Thus, we are dealing with the most expensive ATM in the world, which takes 2 thousand from every 100 thousand dollars.

7. Fund change fee. Some managers charge money to switch from one fund to another, even if they belong to the same financial company.

8. Account opening fee. In some funds you have to pay even for the very fact of opening an investment account.

9. Trading costs. This expense is a net fee (not to be confused with the fund's entry fee) charged on each purchase or sale of assets.

10. Brokerage fee when joining and leaving the fund. Paid directly to the broker and reduces the amount that can be used to purchase assets from the outset.

Myth No. 3 “Our income? They are absolutely transparent"

Surprisingly, the returns claimed by investment funds do not match the returns received by clients.

Jack Bogle, founder of Vanguard

Most people are familiar with the clause in contracts that states that past results are no guarantee of future results. But few people realize that even past performance data may not be true.

"How Funds Are Legally Manipulating the Numbers" (Wall Street Journal, March 31, 2013)

Pig in lipstick

In 2002, the Charles Schwab company launched a funny television series ads, in which the head of the fund gives a morning instruction to his employees: “Tell clients that they will not have such a great opportunity again! We must act immediately! Just don’t mention the fundamentals – they’re worthless.” At the end of his speech, he hands the best broker tickets to a Knicks basketball game and, addressing those present, says: “Let's put lipstick on the pig.”

Get to know me on the good side

In 1954, Darrell Huff wrote a book called How to Lie with Statistics. It states that "innumerable tricks are used to deceive rather than inform people." Today's mutual fund industry also uses a number of techniques to publish its earnings data, which, according to Jack Bogle, does not reach investors. But before exposing this “magic of numbers”, you must first understand what is meant by average profitability.

The chart below shows a hypothetical market situation that resembles a roller coaster. The exchange rate first rises by 50 percent, then falls by 50 percent, rises again by 50 percent, and falls again by 50 percent. You will probably come to the conclusion that in the end, zero profitability will be achieved and you will not incur losses. This is a big misconception.

As you can see from the graph, if you have a certain starting amount (let's say $100 thousand), then after four years you will be in the red by $43,750, that is, by 43.75 percent! You thought you were on your own, but in fact you lost 43.75 percent! Could you imagine such an outcome? Now that you have become an insider, you need to be constantly on your guard! When it comes to average returns, factors come into play that don't actually exist.

MARKET STATE

In his article "Exposing the Profitability Myth" published in Fox Business, Eric Krom explains why such discrepancies occur in the real world: "Let's look at the Dow Jones index since 1930. If you add up all the indicators and divide the resulting sum by 81 (the number of years), the average return will be 6.31 percent. If you perform all the mathematical operations step by step, then the true yield would be 4.31 percent. Why is it so important to understand this? If you had invested $1,000 at 6.31 percent interest in 1930, you would have $142,000 today; then only 30 thousand.”

Tricky Weighing

Now that you've realized that average returns don't reflect what you're actually getting, sit back and relax, because we haven't gotten to the big illusion yet. Wall Street mathematicians manage to embellish their figures even further. How?

In short, the returns advertised in investment fund marketing materials, in the words of Jack Bogle, “do not fully reflect reality.” Why? Because the indicators indicated in the brochure are time-weighted average. At first glance it sounds too abstruse, but it is not (by the way, you can show off your erudition at the next party if you say this expression among your friends).

If at the beginning of the year we had 1 dollar in our account, and by the end of the year - 1.2 dollars, then the fund manager claims that the return was 20 percent. In this case, he calls the marketing department to their feet so that they place this news in all advertising materials. However, in reality it is rarely the case that the entire investment amount is in the fund on the first day of the year. Typically, contributions are received in installments throughout the year in the form of pension contributions from each salary. And if you invest more when the fund is performing well, and reduce your contributions when things slow down (as is usually done), the end result will diverge even further from what is advertised. Thus, in order to understand how much we really earned (or lost), we need to sit down and count, day after day, how much and when we deposited into the account and withdrew from it. This will be the true profitability monetary value weighted. It is very different from what investment fund managers tell us about.

Jack Bogle constantly advocates for changing this situation. He believes investors want to know exactly how much they actually made (or lost). It would seem that this is a completely legal requirement dictated by common sense, but the funds are resisting it in every possible way. Bogle explains, "We compared the money-weighted returns earned by mutual fund investors to the time-weighted average returns reported by the funds, and the result was that investors underperformed the funds by 3 percent." Wow! The fund advertises a return of 6 percent, but investors receive about 3 percent.

Way out

The average yield is reminiscent of the photos we post on dating sites. She embellishes reality.

You should also remember that when funds advertise their returns, they have in mind a hypothetical client who invests the entire amount on the first day, but in reality this rarely happens, so glossy advertising brochures can lead us to the wrong conclusion that their profitability is what we will get in our hands as a result.

The way is open

Nobody says that climbing a mountain is easy. But it becomes much easier if you have a machete of truth in your hands, with which you can cut through the thickets of lies and look at the path ahead. Once you become an insider, you will no longer be going in blind.

Now you know that actively managed mutual funds don't beat the market over the long term (especially when you factor in all the fees and taxes).

You already know that the amount of fees paid to the fund matters. By reducing this figure, you can regain up to 60-70 percent of future profits. Do you understand the impact this could have on your future?

Finally, you know that the fund's reported average returns are not true. You should be interested in real profits. And you now have simple tools that will help you calculate it.

You have already taken the first steps towards financial freedom. You have chosen your path, and the knowledge you gain will forever separate you from those who move in obedience to the herd instinct.

Solo flight

When I tell people all this, I often notice that they become distrustful of others. Realizing reality and internalizing real rules of the game, they begin to feel cheated. They come to the conclusion that they need to isolate themselves from everyone and take everything into their own hands, because they cannot trust anyone. But that's not true. There are many financial professionals who truly want a better future for their clients. I have a wonderful advisor who I trust implicitly to manage my investments because I am confident that he has my best interests at heart. Like you, I am constantly busy. I don't have the time or desire to spend entire days on a detailed analysis of my investment portfolio. In practice, it is enough to audit your investments once every quarter or six months, check your goals and, if necessary, change the portfolio structure.

How can you determine who you are dealing with: a seller or a faithful adviser? With a broker or guide? By debunking Myth #4, you can quickly figure out who the person is sitting on the other side of the table and decide whether he is working for you or for his company. As the anonymous leaker who caused the Watergate scandal said, “Always follow the money. Go where the money points."

Myth No. 4. “I am your broker and I want to help you”

It is difficult to get a person to understand something if his salary depends precisely on his not understanding.

Upton Sinclair

Let me speak frankly

Let's summarize briefly.

Mutual funds charge astronomical fees and commissions that could reduce my future income by 70 percent.

Ninety-six percent of actively managed funds fail to achieve market average returns over the long term.

Mutual funds charge me 10 to 30 times more in fees than market index funds.

The returns that mutual funds advertise are usually much higher than what I will get from them because they use time-weighted averages in their calculations rather than dollar-based returns. Money-weighted returns are what we actually get, while time-weighted returns are a number used only in advertising materials.

And to top it all off, the broker looks at you with honest eyes, assuring you that he is acting solely in your interests. It is quite possible that he sincerely wants to help you, but does not understand the essence of everything stated above. He was simply not taught this. It is even possible that in his own financial affairs he follows the same advice that he gives you.

Blow by blow

But why do the vast majority of Americans voluntarily subject themselves to the execution of a thousand cuts, instead of rising up, voting with their wallets and putting their hard-earned money into other hands? The fact is that they were kept in the dark for decades. Most of those I've spoken to are highly suspicious of the financial services in general and to her desire to “help” us succeed. They've already been burned by this. However, when, in addition to everyday needs and worries, mountains of conflicting information and advertising fall on our heads, it is easy to become confused. Many have translated their financial activities on autopilot and voluntarily agreed to become part of the herd. Their strategy can be summed up in one word: hope.

There's something soothing about knowing you're not alone. This all reminds me of movies about wildlife on the Discovery Channel, where a wild animal cautiously approaches a crocodile-infested pond to drink, even though it saw the crocodile's jaws closing on its fellow creature just minutes earlier! Is this animal really that stupid? No! It simply knows that it will die without water under the scorching African sun, so it takes a calculated risk. Most of us do the same. We know that we cannot afford to sit on the shore and do nothing, since inflation will destroy our savings. Therefore, overcoming the trembling, we head together with our neighbors and colleagues to the water. And at the moment when we least expect it, suddenly... grab! “Black Monday”, a bubble of Internet companies, just another 2008.

At the same time, the brokerage firm to which we entrusted the life of our family takes no risks and receives record profits year after year.

As of early 2014, the market continues to grow. From 2009 to the end of 2013, it rose 131 percent (including reinvestment of dividends). This is the fifth-fastest period of growth in history. People see their accounts replenishing and peace of mind returning to them. Mutual funds take advantage of this. But crocodiles still want to eat.

Protection from whom?

At the end of 2009, Congressmen Barney Frank and Chris Dodd introduced a bill to reform Wall Street and protect consumers' rights (the so-called Dodd-Frank Act) in the House of Representatives. A year later, after heavy lobbying from the financial services industry, the law was passed, although it turned out to be much more toothless than the original version. But no one ever asked the question: “From whom, exactly, do we need protection?”

From those to whom we trust our financial future? From brokers who sell us expensive mutual funds? From the managers of these funds who play shady games to line their pockets? From high-frequency traders who "run ahead of the market" and snatch one cent from each trade millions of times per second? In the last couple of years alone, we have repeatedly witnessed how dishonest traders brought multi-billion-dollar losses to banks, how large financial firms like MF Global abused clients’ money and then declared bankruptcy, how employees of one of the largest hedge funds in the world brought criminal charges of using insider information for personal gain, as bank traders who manipulated the London interbank rate LIBOR, which is a benchmark for many short-term transactions, found themselves in the dock.

“With my brains and your money, we won’t lose anything except your money.”

The cook does not eat what he has prepared himself

We are constantly bombarded with avalanches of advice like “Do as I say, not as I do.” A sobering 2009 Morningstar report examining the performance of 4,300 actively managed mutual funds shows that 49 percent of managers do not own shares in the funds they manage. They are like a cook who does not eat what he himself has prepared.

Most of the remaining 51 percent of managers put very little of their income into their funds. But we must remember that their earnings amount to millions, or even tens of millions of dollars.

● 2,126 managers do not invest money in their funds;

● 159 managers invested from $1 to $10,000;

● 393 managers – from $10,001 to $50,000;

● 285 managers – from $50,001 to $100,000;

● 679 managers – from $100,001 to $500,000;

● 197 managers – from $500,001 to $999,999;

● 413 managers – over a million dollars.

But then it’s interesting: if the people running the fund don’t invest money in it themselves, what good is the fund? Good question!

The cook does not eat what he himself has prepared in cases where the dish contains low-quality ingredients or when he knows too well the conditions under which the food is prepared. Fund managers are smart people and know how to protect themselves.

Where are the clients' yachts?

Fred Swede Jr. was a professional trader, but left Wall Street after he lost... O most of their money during the stock market crash of 1929. In 1940, he wrote the classic book on investing, Where Are the Clients' Yachts? (“Where Are the Customers’ Yachts?”). The joke behind this title has been told in many different ways over the years, but here's how it sounds in Swede's version. A successful Wall Street broker, William Travers, was walking around Newport while on vacation and saw many beautiful yachts at the pier. He started asking who their owners were, and it turned out that they were all brokers, bankers or traders. “Where are their clients’ yachts?” - he asked.

It's been almost 75 years since this story was first published, but it feels like it happened just yesterday!

Attention! This is an introductory fragment of the book.

If you liked the beginning of the book, then full version can be purchased from our partner - distributor of legal content, LLC liters.

Donald Trump (1987)

45 weeks on the bestseller list scientific literature according to the New York Times; has sold more than 3 million copies since publication.

"Call Me Ted"

Ted Turner (2008)

Four weeks on the New York Times list. Sold 322 copies, 117 of which in the first year.

"What I Know for Sure"

Oprah Winfrey (2014)

Behind Lately Winfrey has sold 31,256 copies, allowing her to spend two weeks on the New York Times list since the book was published in September.

Top Earning Authors

Bestselling Factory James Patterson is back at the top of our list of the highest-earning authors after languishing in second place for a year. Patterson earned $90 million from 13 books published in 2013, a staggering 221% more than runner-up Dan Brown.

This year's roster is full of everyday heroes. This is Danielle Steel, Stephen King, JK Rowling. The most notable newcomer is 26-year-old Veronica Roth, a young star of young-adult fiction whose Divergent trilogy has earned $17 million (the film adaptation of the same name, released in March of this year, grossed $151 million in the United States).

Most glaringly absent from the list is the one who knocked Patterson off the top spot last year: Erica Leonard James, whose Fifty Shades of Gray trilogy sold 1.8 million copies in 2013. This is significantly less than the more than 29 million sold a year earlier. The writer's income has dropped from $95 million to $10 million, which is apparently still enough to keep herself in handcuffs and silk scarves.

Buffett Book Club

In his annual address to Berkshire Hathaway shareholders, Warren Buffett noted a slight decline in the company's performance and, in connection with this, made recommendations on literature to top management.

2001: “Jack. My Gods at GE" (Jack: Straight from the Gut)

Jack Welch

"Get a copy! Joe (Brandon, later CEO of General Reinsurance Corp.) is a lot like Jack."

2006: “Where are the clients’ yachts?” (Where Are the Customers’ Yachts?)

Fred Swede

"The funniest book ever written about investing."

2006: Poor Charlie's Almanack: The Witand Wisdom of Charles T. Munger

“One unfortunate soul asked Charlie (Munger, Berkshire vice chairman) what she should do if she didn't enjoy the book. Munger advised: "No problem - just give it to someone smarter."

17 books about business and investments that billionaire Warren Buffett mentioned in his interviews, articles or letters to shareholders.

According to Pulse, when Warren Buffett was just starting out as an investor, he read between 600 and 1,000 pages a day. Now famous entrepreneur spends up to 80% of his time reading. “My job is essentially to put together a lot of facts and data to see how they interact,” Buffett himself noted in an interview.

Pulse's editors studied Buffett's interviews over the past 20 years and identified 17 books that the entrepreneur recommended for reading during these conversations.

1. “The Intelligent Investor”, Benjamin Graham

Buffett read this book when he was 19 years old. According to the entrepreneur, his work helped him build “an intellectual platform for further development as an investor.” To become successful in business, Buffett says, you need an intellectual basis for making decisions. This is exactly the basis that the book gave him.

2. “Security Analysis”, Benjamin Graham

According to Warren Buffett, one more work of Graham actually helped him to create the "map" of investments, which he has been following for 57 years. As the entrepreneur notes, Benjamin Graham is the second most influential figure for him after Buffett's father. “Ben was a great teacher,” says the billionaire.

3. “Common Stocks and Extraordinary Returns”, Philip Fisher

Philip Fisher specializes in investing in innovative companies. Despite the fact that he occupies a different place in Buffett's life than Benjamin Graham, the entrepreneur highly values ​​his work. “I'm willing to read whatever Phil has to say through his books, and I encourage you to do the same,” he says.

In "Common Stocks and Extraordinary Earnings," Fisher explains why it is important to look not only at a company's financial statements, but also at the management principles used by its management.

4. “Stress Test: Reflections on the Financial Crisis” by Timothy Geithner

Warren Buffett believes that every manager should read this book about the financial crisis from the former US Treasury Secretary.

“Many books have been written about how to manage a business in difficult times. But this book describes the strategy of managing an entire state in difficult times - and, moreover, it was written by someone who was involved in this himself.”

5. "The Essays of Warren Buffett", Warren Buffett

“If you want to understand how Warren Buffett thinks, it’s worth reading a book by Warren Buffett himself,” writes the editor of Pulse. One of the thoughts from this book: “What could be more profitable than having an opponent in an intellectual competition (be it chess or stock trading) who is convinced that thinking is a waste of time?”

6. “Jack.” My Years at GE by Jack Welch

Warren Buffett mentions this book in a letter to the shareholders of his company, written in 2001. Buffett describes Jack Welch, a former top manager at General Electric Corporation, as an intelligent and energetic person.

According to Bloomberg, Welch's experience will be useful to any leader - he has had such a great influence on the modern business environment. Buffett strongly recommends a copy of his book.

7. “Rules for the Best CEOs”, William Thorndike

Buffett also mentioned Thorndike's work in one of his letters to shareholders - already in 2012. The billionaire notes that the book is “a remarkable account of managers who have distinguished themselves by being particularly wise in their capital allocation.” One of the chapters of the book is dedicated to entrepreneur Tom Murphy - Buffett calls him the best manager he has ever known.

8. "Investors vs. Speculators", John Bogle

John Bogle - founder of a large American investment company Vanguard Group, which manages more than $3 trillion in assets. In his book, he reveals the idea that long-term investment in the global market has replaced short-term speculation - citing both theoretical and practical examples and evidence.

In addition, Bogle gives some valuable advice to beginners and experienced investors - for example, he always remembers that what is in fashion today will not necessarily be as popular tomorrow.

9. “Business adventure. 12 Classic Wall Street Stories by John Brooks

In 1991, writes the editors of Pulse, Microsoft founder Bill Gates asked Buffett to talk about his favorite book. In response, the billionaire sent Gates his copy of Business Adventures.

According to Bill Gates, this book serves as a reminder to him that no matter what happens, the principles of building a business always remain the same. The founder of Microsoft writes: “On the one hand, in any business there is human factor. But this doesn’t matter if you have a great product, a plan for its development and a proven marketing strategy. True, you still need good people to carry out these plans.”

10. "", Fred Shved

In his 2006 letter to shareholders, Buffett called the book "the funniest piece of investing ever written." “She conveys many truly important messages to the reader in an easy-to-follow manner,” the billionaire writes.

11. "Essays In Persuasion", John Maynard Keynes

“Even though this collection of writings from the legendary economist was published more than a century ago, it remains one of the must-read books for financiers,” writes Pulse. One of Keynes's famous works is "Economic Opportunity for Our Grandchildren", in which he suggested that today's generation could work only 15 hours a week.

Buffett believes that Keynes' essay can really help understand the structure of the securities market.

12. The Smart Investor's Guide, Jack Bogle

In a letter to shareholders written in 2014, Buffett suggested that anyone seeking financial advice should read Bogle's "The Smart Investor's Guide" instead. In the book, the author, based on his own experience working with clients, tries to help readers use index investing to build wealth.

Fans of the book note that it is not at all boring, and the graphs and statistics in it are diluted with jokes and practical advice.

13. "Poor Charlie's Almanac", Peter Kaufman

A collection of speeches and articles by Charlie Munger, an American lawyer, economist and professional investor. In a letter to shareholders in 2004, Buffett wrote: “The industry has spent too long trying to figure out whether Charlie is the reincarnation of Ben Franklin. The answer to this question is contained in this book."

One of the most interesting articles included in the book is the discussion “The Psychology of Human Errors,” in which the author describes the cognitive traps that investors often face.

14. "The Most Important Thing" by Howard Marks

According to the billionaire, this book is very useful for investors, which “is very rare.” In his work, the founder of Oak Tree Capital, Howard Marks, talked about the mistakes he made along the way as an investor, how he dealt with them, and what he learned for himself.

15. "Dream Big", Christian Correa

In the book, Correa describes the story of the three Brazilian entrepreneurs and investors who founded 3G Capital and the style of their management of the firm. Buffett recommended this work in his letter to shareholders in 2014.

16. “A Dream to Start,” Jim Clayton and Bill Rutherford

Jim Clayton grew up the son of a sharecropper in Tennessee, and when he grew up, he founded his own company, Clayton Homes, now one of the largest manufacturers of mobile and modular homes.

Many people dream of owning their own snow-white yacht, but, alas, not everyone can afford it. Still, the number of lucky people who have a “dacha with a motor” on the water somewhere on a reservoir near Moscow or in a Montenegrin marina continues to grow. The correspondent went to the British port city of Plymouth to the Princess shipyard to see with his own eyes what the production of luxury motor yachts looks like.

The city accepted

Plymouth has been associated with the sea since time immemorial. From here the famous Admiral Drake set off on his daring campaigns, here the pilgrims who laid the foundations of the American colonies climbed aboard the Mayflower, and the naval base still serves as one of the main facilities of the Royal Navy. Once upon a time, warships were built here with all their might; Today, however, Plymouth's largest shipyard deals exclusively with the civilian fleet - luxury motor yachts. For more than half a century, Princess has been launching its boats, which are recognized by industry experts as one of the best in their class.

Work is underway at five sites scattered throughout the city. In one huge workshop, parts of plastic hulls are stamped, in another, flybridges are assembled; a separate room is reserved for the installation of various wiring (there are several kilometers of it in an average yacht). The company is especially proud of its own furniture production. By the way, many designers are working on interiors famous brands- the shipyard belongs to the leading luxury holding LVMH, which affects both prices and clientele. The Princess yacht will cost the customer at least half a million pounds sterling. Some may prefer the cheaper offerings of the aggressive newcomers from Turkey and China, but in the case of buying one of the most luxurious vehicles in the world, the savings are unnecessary. “Turkish and Chinese shipyards are not competitors for us. When a client wants real quality, they turn to us or the Italians,” comments sales manager Simon Colebrook, who gives a tour of the workshops.

Owning a yacht is the absolute, unrivaled embodiment of luxury, says Princess Yachts marketing director Kieran Haslam - and it's hard to disagree with him. That’s why we have a reverent attitude towards the creation of each yacht: despite the widespread use of advanced technologies, a lot is done by hand, with precise adjustment down to the micron. Princess Yachts launches about 300 hulls a year, but the construction of each yacht takes at least three months (for the largest, the 40-meter Princess 40M, it takes up to two years). Of course, for their money - and waiting time - customers expect only the best. And to fulfill your whims regarding appearance: According to Colebrook, “the customer can order any color of the body. It seems that the most extravagant one was sea green, but for some reason no one has ordered a pink yacht yet.”

At the client’s request, the shipyard also installs third-party equipment: from lighting ordered from leading European companies to media centers. “The audio and video system installed on our yachts is usually Naim, Harman Kardon or JL Audio. The last word, of course, belongs to the client - on large boats the cost of custom entertainment center could be over half a million pounds,” Colebrook explains. You can immediately order “water toys” like the popular Seabob underwater vehicle, which resembles a gadget from the arsenal.

Industry and nature

Princess yachts are bought by clients all over the world, but Russian market has always been one of the most important for the shipyard. Last year, Russians purchased several dozen yachts of various lengths; flybridge models are especially popular. For the convenience of clients, the official Russian dealer of the shipyard, Nordmarine, operates not only in Moscow, but also in the Principality of Monaco - for obvious reasons (primarily climatic), many prefer to keep the yacht moored in the Mediterranean. By the way, unlike other segments of the luxury industry, yachts remain a bastion of the stronger sex. “The majority of clients are still men. But a woman’s opinion is often decisive when choosing options,” says Colebrook.

The shipyard is especially proud of its special room where full-size models of yacht interiors are built. “Here we can really test whether it’s comfortable to sit at the helm on the flybridge, whether there’s anything blocking the passage to the bed in the owner’s cabin, whether the stairs are comfortable,” Colebrook explains. According to the company's management, not every shipyard can afford such a "pilot production" - it occupies a considerable area. By the way, the building in which the model room is located is also not entirely ordinary. This is an ancient military fort that once protected the approaches to the city from the sea. It also contained barracks and a prison for the sailors of His Majesty's fleet. The shipyard bought the buildings from the state, but, since they are classified as cultural heritage sites, it is obliged to preserve them in their original form. And not only from the outside - behind a small door next to the model room there is a cell in which death sentences were carried out. The scaffold is still in place, as is the crossbar on which the hangman's noose was attached. “We sometimes have morning meetings here,” Colebrook jokes, revealing the dark legacy of the past.

However, Princess cares not only about the past, but also about the future. The shipyard actively cooperates with the British Marine Conservation Society. In particular, the company finances research and conservation work on the unique marine fauna and flora in the area of ​​the Eddystone lighthouse, located 20 kilometers from Plymouth on the open sea. The lighthouse was built three centuries ago to warn ships of the dangerous reef on which it rests. “We are very proud to be the first yacht brand to partner with the Marine Conservation Society and we are 100 percent committed to this project. The ocean is ours playground and a matter of concern to the entire Princess community. Not only the company itself and our clients are involved, but also distributors. I would especially like to note the financial support from Nordmarine, our distributor in Russia,” emphasizes Kiran Haslam.

In addition, the shipyard has allocated funds for banding sea turtles in the Caribbean - this makes it possible to track the migration of animals and often saves them from ending up on the plates of tourists as a local delicacy. “Some may find it strange that we are concerned about the problem of turtles on some distant islands. But that's where our clients spend a lot of time on our yachts - and we can't stay away,” says Haslam.

The final part of the shipyard tour (which, by the way, lasted two days - total area is almost three hectares) is dedicated to the new product - the flybridge Princess 55 with huge windows and a spacious master cabin, as well as yachts preparing to launch. They stand on mobile stocks, with huge wheels as tall as a man, and still seem like giant sea monsters, thrown onto land by the will of the waves. But as soon as the yachts slide to the quay wall and find themselves in their natural element, they seem to transform, taking on the proud appearance of independent beauties familiar to every yachting fan. However, they still have the final finishing of the interior and cabins ahead, after which they will be sent on a journey to their home base.

Fred Schwed's 1940 book Where Are the Customers' Yachts? (Where Are the Customer's Yachts?) is considered a classic work on investing. Its name was born from a once popular joke about Wall Street: a guide showing a visitor around New York's financial district draws his attention to several beautiful ships anchored off shore. “Look,” says the guide, “these are the yachts of brokers and bankers.” To which the naive visitor says: “Where are the yachts of the clients?” Swede’s book, based on his own experience, casts a satirical look at Wall Street in the spirit of Mark Twain. She also gives some insightful philosophical definitions, such as: “Investing and speculation are considered two different things, and the prudent person is advised to engage in the former and avoid the latter. It's like explaining to a troubled teenager that Love and Passion are two different things."

He was born in New York, and his acquaintance with the machinations of Wall Street began early - his father was a member of the New York Curb Exchange (formerly the American Stock Exchange). The Swede studied at Princeton, but he was kicked out of his senior year - he was caught at night in his dorm room with a girl. He completed his undergraduate education at Columbia University. After graduating, he worked as a reporter for The New York Times and then the Wall Street Journal before working on client accounts for a stock brokerage firm. Obviously he wasn't very high opinion about his work, judging by what he said about mutual fund salesmen: "They can be compared to life insurance salesmen. Remember how these life insurers work: at first they cause minor irritation, then they become nauseating, and then they push the policy right down your throat."

The Swede also dabbled in trading, but claimed that he did not get rich as a trader because he listened to a cynical Irish colleague: “What were they created for in the first place?” securities? - said the Irishman. “They were made to be sold, so sell them.” This cynicism, of course, is on display in “,” as the Swede ridicules the Wall Streeter who considers himself a prophet, a scientist and a money wizard.