Paths to Penury Watch

This a magnificently dumb idea: Sort of ETF-like thingies with (almost certainly) higher costs and in narrower areas? I can’t wait to read the ex post forensics on how much money it cost its backers and anyone who throws money at it as an investor. More Paths to Penury ahead!

…Motif allows investors to invest in different portfolios of stocks, each called a “motif,” that are centered around everyday ideas. For example, motifs can be built around themes and ideas ranging from cloud computing to democracy in the Middle East. In addition, each motif can be customized to meet an individual’s ideas or needs.

…For example, there’s a lot of current buzz around the impact the debt ceiling negotiations is going to have on interest rates in the US. Suppose you were reading a news story about how interest rates are likely to rise and decided that you would like to invest in rising interest rates. How would you do this? If you have a money manager, you could call him or her, but it’s not an easy task.

Motif says that the challenge to investing in rising interest rates is that these rates have a negative impact on corporate earnings because they result in increased short-term borrowing costs. So rising interest rates can typically hurt stocks.

But the startup’s Rising Interest Rate Motif would include the small number of companies that hold very large sums of customer cash, and where interest rates rise they can actually increase their earnings. Specific examples of companies that hold large sums of customer cash include online brokerages such as Charles Schwab or E*TRADE, payment solutions companies such as Western Union or Heartland Payment Systems, payroll processors such as Paychex, prepaid cards such as Green Dot, and custodian banks such as Northern Trust.

via Former Microsoft Exec Raises $20 Million For Motif, An Investment Vehicle For Ideas | TechCrunch.


  1. Brent Buckner says:

    I wonder if shorting those ETFs would feel somewhat like collecting their management fees….
    [NOT a recommendation!!]


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