Marketocracy Inc. founder Ken Kam passed away several days ago, at the tender age of 59, following a short battle with lung cancer. The world has lost a highly unique perspective in the selection of securities.
After cofounding and managing the successful high tech product with FirstHand Funds in the 1990’s, Ken became consumed with the notion that certain non-professional investors could pick securities with the same positive results as professionals, and perhaps even best professional results. It was this premise that resulted in Ken creating Marketocracy Inc., arguably the first true incubator for individual investors. Non-professional investors were offered the opportunity to develop a mock portfolio and over time, provided that the results proved out, real portfolios were created to mimic those accounts.
I met Ken during the heyday of the Marketocracy years and was immediately taken with his profound sense of curiosity about what made individuals tick, more so than investments. Ken perpetually challenged investors to produce, and cogently defend, an investment thesis both in writing and in verbal tests. It is my belief that the time spent in writing up an investment selection, evaluating the merits and demerits of any business, punching holes in a thesis; it was this highly regimented practise that enabled me to better determine whether an investment was subpar, ordinary, “good enough for most” or extraordinary. I would evaluate entire sectors, looking for the one or two truly investment worthy businesses, across the entire planet, in order to write up a defendable report. This evaluation system, critiqued by Ken, became easier over time, as repetition became almost a form of machine learning.
During the years evaluating securities for a Marketocracy mock portfolio, I developed a view that many investments deemed to be “world class” by the industry at large, are, in fact, highly ordinary. Concurrently, I also came to the realization that most investments, like most individuals, are pretty unchanging after a certain point; ordinary investments almost never become extraordinary and hoping for the same is simply time wasted. As a result, In no small part, based upon work done and presented to Ken Kam, I became intensely focused, almost entirely, upon the ownership of the extraordinary.
Ken was, in many ways, the most important mentor in my investment career. An uncle introduced me to the basics of the stock market. Time spent early on as an investment broker afforded me the opportunity to meet numerous analysts, mutual fund managers, hedge fund creators, global bank CEOS and far too many politicians to name. I acknowledge them all, but I don’t think any stand out like Ken Kam. He truly wanted to build something that had never been built before, and may not ever be built again. Just as Julian Robertson was instrumental in spinning off a number of “Tiger Cubs” based upon their tenure at the Robertson Tiger Fund, so too has my own investment success sprung from time spent evaluating and building out a portfolio at Marketocracy Inc.
I can state, without hesitation, that my net worth is much greater, for the time served operating a mock portfolio at Ken’s incubator, than it would be had I done it without his oversight. I can also state, that I would gladly part with a portion of my net worth, were it able to bring Ken back. 59 is far too young to leave the earth. In many professions, by age 59, retirement is the nearer term goal. In contrast, in the investment world, the late 50’s can represent the very peak of ones investment prowess; mental acuity and insight is buttressed by a fortress of life experience and the result can be a formidable manager indeed.
Ken Kam continually challenged me to become a far better investor. I AM a better portfolio manager because of my time with him. He was a profoundly positive influence on my professional life and he will be greatly missed.