There is something in the rationale of people choosing hedge funds as a vehicle that I am not getting. The sales pitch must be amazingly slick or people are still captive to the false narrative that hedge funds are enrichment vehicles for someone other than the manager. Investors poured $70.9 billion into hedge funds in…
More than likely. The interesting thing about this piece is that whilst it is largely directed as the Chinese community and their approach to numerology and its perceived importance in decision making the same sort of irrationality applies universally. You need only pick up a copy of our local trading magazine Your Trading Edge to…
What prompted this little piece was I was reviewing someones trading plan and one of the reasons they listed as wanting to trade was fun and my immediate thought was they are not long for this world. The problem with the notion of fun is that represents an emotional investment in the trading process. this…
One of the things I find most intriguing about going to conferences is watching other speakers simply because their approach to the universe is so different to my own. Most go with the aim of confusing the attendees sufficiently that they believe the notion that said guru is indispensable and they must buy whatever they…
Here is an interesting thought for those who like to tinker with their trading systems after a loss. If a pro basketball team’s opponent hits a better-than-expected proportion of its free throws — 80% versus 70% — the coach is half a percentage point more likely to change his starting lineup for the subsequent game, even though the opposing…
In an earlier article for Bloomberg View, I described a danger facing investors: the put-option illusion. This is when investors, who tend to extrapolate too much from recent trends, are fooled into thinking that a string of good returns means an investment has very little risk. Often the risk is just lurking way out in the tail…
The table below grabbed my attention this morning, it from the investment research group Bespoke who produce all manner of statistics on the market. Most of which I neither understand nor use. What the table basically says is that the short sold stocks have outperformed the market on the upside – that is short…
The Fields Medal for mathematics is the equivalent of the Nobel Prize and is awarded to mathematicians under 40. The prizes this year contained a young female mathematician whose work on abstract surfaces is beyond me. This raises the blunt question of why the fuck has it taken so long to give the prize to…
These are a few of things that have been on my reading list lately. The Return How Gamblers Get Hot If You Cant Choose Wisely, Pick At Random Practice Not As Important As Thought What’s the Point If We Can’t Have Fun? Why Smart People Are Stupid
I have snipped the two quotes from the always interesting Lefsetz Letter which is ostensibly about the music industry but is actually about so much more. INFORMATION OVERLOAD The twentieth century was all about scarcity, making it to the top and then dominating. Today there’s so much information that you feel inadequate. It’s an endless buffet…
I thought I might take a bit of a longer look at the events of last week and see what they might mean; if anything. One of the interesting things about markets is the presence of perma- bears – that is traders/pundits/general idiots who no matter what the market condition are constantly calling for the…
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