WHITE PAPERS

I wrote my first White Paper in 1991 in anticipation of a speaking engagement before members of the Investment Company Institute in New York City. The white paper focused on the discounts to the net asset values by which closed-end investment companies traded in the market. By charting the daily discounts over a six-month period, I was able to determine how the current discount varied from the six-month average. To determine if the current discount was significant, I applied standard deviation analysis. When the discount approached two standard deviations below the six-month average, it would show up as a “buy.” Likewise, two standard deviations above the average, it would qualify as a “sell.” Additional confirmation could be had by comparing results to discount data plotted over a three-year period. The results of this work become the thesis upon which Delphi I Partners was founded (see Performance).

According to personnel at Morningstar, in 1993, they began supplying subscribers to their service with daily six-month and three-year discounts on all the closed-end investment companies they covered at the time and continue to cover today. I could find no one at Morningstar however, who had any idea as to why this information is being provided. It was obvious to me; however, that someone from Morningstar was at the convention in 1991.

The second White Paper (presented here in its entirety) deals with the long-term social security mess, how to resolve the increasing deficits, and how to create a system with higher benefits levels. The paper was written in response to a rather clumsy effort by the Bush Administration in the beginning of his second term in 2004, although his inner circle of supporters believed he had the political capital to pull it off. The fact remains that the opposition was able to sink the idea due to his inability to provide any level of detail to the public.

The third white paper deals with the never-ending issue of student loan debt. It was written shortly after the Obama administration presented a simple plan into which the opposition was able to punch many holes. This paper made significant changes to the Obama plan by focusing payments on personal income and lowering the annual payment from 10% of income to 7% of income. It would have also created a floating interest rate, created CDO’s to bundle and sell the debt, and added the Social Security Administration as the plan’s administrator. The Governor of Ohio appointed me to a committee to study the problem. After the first meeting, I realized he had not read the paper.