DEFINITION of 'Eat Your Own Dog Food'

Eat your own dog food is a colloquialism that describes a company using its own products or services for its internal operations. The term is believed to have originated with Microsoft in the 1980s. While it was originally used in reference to software companies using their own internally-generated tools for software development, its usage has spread to other areas as well. Often shortened simply to "dog food."

BREAKING DOWN 'Eat Your Own Dog Food'

The basic premise behind "eating your own dog food" is that if a firm expects paying customers to use its products or services, it should expect no less from its own employees. Not using its own products for internal operations may imply that a company does not think its products are best-of-breed despite its public proclamation of the belief, and that it has more confidence in a rival's offerings.

Fund Managers Prefer Human Food

There's a similar saying in investment management: "Eat your own cooking." Assuming fund managers are human beings, not dogs, the food would be fit for human consumption, and the food, in this case, is a portfolio of assets. As a marketing tactic to attract investors to their funds, portfolio managers (PM) will tout the fact that they eat their own cooking by investing their own money alongside the shareholders of their funds. In 2005, the Securities and Exchange Commission began requiring mutual funds to disclose the amount of PM's personal investments in their funds. Morningstar, the mutual fund research and rating firm, conducted a study in 2015 that indicated that funds managed by PMs with higher personal investments delivered greater returns than the average of the competition, meaningfully so in many cases depending on the asset class and on the amount of personal funds invested. For example, for global equity funds, where PMs invested $1 million or more of their own money in the funds, 68% beat the competition average, compared to 32% of funds with PMs who did not personally invest a dime over a five-year period from 2009-14.

Marketing Blurb

From a Hodges Capital Management marketing piece: "Just as you would not hire a vegetarian as the head chef at a renowned steakhouse, we believe it is important for investors to consider a manager's personal ownership when selecting a mutual fund. At Hodges Capital Management, we 'eat our own cooking' as all of our portfolio managers have meaningful ownership in the mutual fund(s) that they manage."

RELATED TERMS
  1. Dog Eat Dog

    Dog eat dog refers to intense competition in a market.
  2. Mutual Fund

    Mutual funds combine money from many investors to invest in a ...
  3. Cats And Dogs

    Cats and dogs is a slang term referring to speculative stocks ...
  4. Funds Management

    The management of the cashflow of a financial institution. The ...
  5. Investment Fund

    An investment fund is the pooled capital of investors that enables ...
  6. Managed Account

    An investment account that is owned by an individual investor ...
Related Articles
  1. Investing

    Barking Up The Dogs Of The Dow Tree

    One well-known and successful strategy for cashing in on dividends is the Dogs of the Dow. Here's what you need to know about them.
  2. Investing

    Burger King's New Hot Dogs:Vertical Integration Genius

    Burger King is moving beyond burgers into hot dogs. Here is why this is a smart move.
  3. Investing

    How Much Company Stock Can a Mutual Fund Own?

    There is no written rule that stipulates how much of a company a mutual fund can own.
  4. Investing

    Has Your Fund Manager Been Through A Bear Market?

    How to find a portfolio that will survive when the bulls stop charging.
  5. Investing

    The Advantages and Disadvantages of Mutual Funds

    As with most investments, mutual funds have both advantages and disadvantages.
  6. Financial Advisor

    5 Characteristics of Strong Mutual Fund Shares

    Discover some of the basic characteristics shared by good mutual funds that investors can use to help them in selecting funds.
  7. Investing

    Should You Follow Your Fund Manager?

    Learn how to tell if a fund in flux is still a suitable investment.
  8. Financial Advisor

    This Is How Much Mutual Fund Managers Make

    Learn about the high-paying salaries of mutual fund managers and the low level of transparency in income reporting by mutual fund companies.
  9. Financial Advisor

    5 Secrets You Didn’t Know About Mutual Funds

    Learn five of the "secrets" about mutual funds that can have a significant impact on mutual fund choices and investor profitability.
RELATED FAQS
  1. How do I judge a mutual fund's performance?

    Evaluate mutual fund performance utilizing resources such as Morningstar; compare the fund with others in its peer group ... Read Answer >>
Hot Definitions
  1. Fibonacci Retracement

    A term used in technical analysis that refers to areas of support (price stops going lower) or resistance (price stops going ...
  2. Ethereum

    Ethereum is a decentralized software platform that enables SmartContracts and Distributed Applications (ĐApps) to be built ...
  3. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
  4. Financial Industry Regulatory Authority - FINRA

    A regulatory body created after the merger of the National Association of Securities Dealers and the New York Stock Exchange's ...
  5. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs are often issued by companies seeking the capital to expand ...
  6. Cost of Goods Sold - COGS

    Cost of goods sold (COGS) is the direct costs attributable to the production of the goods sold in a company.
Trading Center