Monday, April 15, 2013

Hooked on phonetics

Serving in the armed forces provides many benefits. For me, it meant spending 39 months in Hawaii (which my wife and I jokingly refer to as my "hardship tour") and another year+ in Oklahoma (I was on active duty at the tail end of the Vietnam War (when you couldn't "buy a ticket" there; there were no other armed conflicts, so for the most part I served during "peacetime").  It also paid for half my undergraduate degree (I had an ROTC scholarship), and most of my two masters degrees (through the GI Bill). It also provided me the opportunity to have pretty significant responsibilities for a young 20-something, fresh out of college.

Another benefit is that you learn the phonetic alphabet. What's that? It is a way to spell words using words for each letter. For example, to spell the word "cat," I'd say Charlie, Alpha, Tango. Why do we do this? Well, when you're speaking over a radio and want to communicate something clearly, many of our letters can sound alike (e.g., n and m; b, c, d, e, and t). You've no doubt heard people do this, with words they just makeup; e.g., to spell cat they may say Camera, Apple, Tomato. If you watch WWII movies, you'll hear a slightly different version (Able, Baker, Charlie, Dog ...).

I can usually tell someone who has been in the military, because they'll also spell "the military way." The full alphabet is: Alpha, Bravo, Charlie, Delta, Echo, Foxtrot, Golf, Hotel, India, Juliet, Kilo, Lima, Mike, November, Oscar, Papa, Quebec, Romeo, Sierra, Tango, Uniform, Victor, Whiskey, Xray, Yankee, Zebra. And, the number nine has a special way of identifying, too (niner)!

Being able to spell phonetically can come in handy, yes? When you're trying to spell your name, for example, to someone. For me, it's simply Sierra, Papa, Alpha Uniform, Lima, Delta, India, November Golf. 

So, what's the point of this lesson on phonetics? It's a standard, which everyone who needs to knows and understands. You will never hear someone in the military concocting their own version, or substituting other words for letters. It's a known and clearly defined standard. The words were chosen to avoid confusion. Communicating is serious business; it's a subject that has had a lot said and written about it. When one is going into the service, it's something that you're drilled on, so that for the rest of your life you are able to spell phonetically; you don't forget this stuff.

Standards serve a purpose; if they're written well and clearly, they're able to be adhered to. Somethings are more challenging to define, however. Letters are simple. But, when it comes to the business of performance measurement, with all of its variations, it's not surprising that we run into occasions when the rules aren't overly clear; thus, we need some interpretation. There's nothing wrong with that, provided that the principles of the standards are adhered to.


  1. What is the SEC no action letter? It seems almost impossible to hide the fact that you manage SEC registered mutual funds, it is usually something that "everyone" just knows. Also based on the GIPS discretionary/non-discretionary labels for all portfolios I would think a prospect could figure it out anyway with just a little bit of research. But given your example, could the manager simply put a generic footnote in on all composites across the board? "If composite includes a mutual fund, than these other fees are included"?

  2. Miles, email me and I'll send you the letter ( I think there is no reason to reveal the presence of a mutual fund; perhaps I'm missing something.


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