Dismal Hedge Fund Performance
The appalling performance of hedge funds continues. I have taken the yearly data for the HFR Equity Hedge Fund database converted it to the value of $1 invested and compared it to the S&P500 Total Return Index.
How Our Physical Health Impacts Our Trading Psychology
* Recent research suggests that a sedentary lifestyle–one without exercise–is more harmful to our health than smoking, diabetes, or high blood pressure. The lack of aerobic fitness is a larger risk factor for mortality than having many medical conditions that we regard as necessary to treat. * Poor posture, such as sitting hunched over a screen for…
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Have Institutional Investors Spoiled the Hedge Fund Party?
Hedge fund performance has declined precipitously since the 1990s as assets under management have exploded. The managers are not solely to blame. While alpha has withered, large institutional investors have piled into large hedge fund managers that are perceived to be safe — an industry transformation beautifully summarized by Blackstone Group: The original hedge fund clients,…
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Sensation Seeking and Hedge Funds
ABSTRACT We show that motivated by sensation seeking, hedge fund managers who own powerful sports cars take on more investment risk but do not deliver higher returns, resulting in lower Sharpe ratios, information ratios, and alphas. Moreover, sensation‐seeking managers trade more frequently, actively, and unconventionally, and prefer lottery‐like stocks. We show further that some investors…
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There Is No Magic
LB and I have just wrapped up the final in our series on full time trading. For the most part they have been enjoyable except for one twat who complained that it was unprofessional of LB to not present when she was suffering from severe laryngitis. Presenting for the first time in years is an…
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Fun with ETF’s, Indices and Fund Managers
Its a shitty day in Melbourne, so with nothing better to do I decided to fire up excel, download a bit of data and see what I could learn. Anyone who has spent more than 10 minutes on this blog will realise that I am fascinated by mechanisms of generating excess return with minimal cost…
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Other Peoples Money
Institutional Investor have just published their latest list of the top hedge fund earners from 2017. To make things easier I have converted the list into the table show below. The return column is the return for 2017 from the groups highest performing fund. I then decided to reorder the table based upon performance. I…
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Mum And Dad Investors Are Snowflakes
I have been thinking about this piece I posted yesterday. The central tenet is that to admit a mistake is to undermine one’s sense of self. Thus doing so is extremely difficult for professional money managers. My thoughts have drifted to the current round of pending and proposed legal action by shareholders against various companies,…
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Inside the World’s Most Elite (and Secret) Traders’ Club
In an industry where power and influence are measured in dollars and cents, this may be the most exclusive club in finance: The price of admission is at least $25 million. It has no name and no board of directors but has a roster drawn from the world’s wealthiest and most successful traders. Members essentially become…
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