Posts filed under “Hedge Funds”

The Biases of Your Favorite Market Pundits . . .

Ever wonder what motivates various pundits, strategists and fund managers to spout off about whatever it is they are yammering on about?

Step back and examine all of the various words spilled on markets. Scratch a little beneath the surface, and you quickly realize that not all participants are in a relentless search for the truth.

A few years ago, I noted that good investors have to wear many hats: One part historian, one part mathematician, one part psychiatrist, one part accountant and one part trial lawyer.

When it comes to market commentary, that last one can be especially helpful. Putting a witness’s motivations into broader context can often shed some light on their position. Why did they say that? What incentives might they have? What are they subconsciously rationalizing?

As I have noted before:

Good litigators are always skeptical, but not negative. Is that witness telling the truth? What is motivating him? Is the opposing counsel’s argument logical? Being able to answer these questions makes for a good lawyer – and a good investor . . . When it comes to investing, everyone is trying to separate you from your money. Good investing requires good judgment. Being able to recognize valuable intel versus the usual blather is a huge advantage.

So let’s play a game of cross-examining attorney.  Continues here.


Category: Financial Press, Hedge Funds, Investing, UnGuru

It’s a Tech Bubble! Unless You Care About Earnings and Valuations

Earlier this week, Greenlight Capital hedge fund manager David Einhorn reignited the bubble debate that we have spilled so many pixels dissecting. The shorter of Lehman Brothers and the New York Mets fan said in a quarterly letter to clients “we are witnessing our second tech bubble in 15 years.” The Bubble Chatter is nothing…Read More

Category: Hedge Funds, Psychology, Short Selling, Valuation

The Cognitive Side of Hedge Fund Investing

Larry Swedroe, research director for BAM Advisor Services LLC, noted earlier this month that total hedge fund assets under management, or AUM, reached $2.63 trillion. This represents a sizable increase, despite fund performance generously described as lackluster. The increase in assets under management led to some interesting discussions. Lots of readers had e-mailed me with…Read More

Category: Hedge Funds, Investing, Psychology

How Important Are Hedge Funds in a Crisis?

How Important Are Hedge Funds in a Crisis? Reint Gropp Federal Reserve Bank of San Francisco April 14, 2014       Before the 2007–09 crisis, standard risk measurement methods substantially underestimated the threat to the financial system. One reason was that these methods didn’t account for how closely commercial banks, investment banks, hedge funds,…Read More

Category: Bailouts, Hedge Funds, Think Tank

Why Has Hedge Fund AUM Hit New Record Highs?

I have been fairly fascinated by hedge funds for quite some time. I began studying them earlier last decade. It has been an intriguing field for investigation for a number of reasons: 1) Alpha Generators: In the early days of hedge funds, they created a ton of Alpha. Like pre-expansion sports leagues, there was a…Read More

Category: Hedge Funds, Investing

Anonymous Stock Tips, Touts & Fraud

A quick note this morning on anonymously stock tips, one I hope will be less cranky than yesterday’s screed. Greenlight Capital hedge-fund manager David Einhorn last month filed suit against the Seeking Alpha website, demanding to learn the identity of an unidentified blogger who had revealed that Greenlight was acquiring shares of Micron Technology Inc….Read More

Category: Hedge Funds, Legal

Cheap & Simple Beats Costly & Complex

  Have a look at the tables above showing the performance of various investments during the five years leading up to the financial crisis lows, and the five years after. It leads us to a rather fascinating exercise, looking at complexity, cost and performance. Let’s start with the worst performers pre-crash: US Real Estate and…Read More

Category: Apprenticed Investor, Commodities, Hedge Funds, Investing

What Is a Hedge Fund?

Source: SlideShare

Category: Digital Media, Hedge Funds

Hedge Funds: Bad Investing Versus Lawlessness

This weekend, I found myself in the rather unusual position of defending hedge funds. Before I explain why that is so unusual, allow me to explain what I was defending them against. Last week, Forbes released its annual score card of top-earning hedge fund managers. The usual gang was there: Soros, Tepper, Cohen, Paulson, Icahn,…Read More

Category: Hedge Funds, Investing, Really, really bad calls

Its all fun & games until someone loses an economy!

Source: Bianco Research This month, 1,865 pages of FOMC transcripts from 2008 were released to the public. Bloomberg studied the transcripts, finding on average about 25 references to laughter per meeting of the Federal Open Market Committee. This was almost half of the 45 giggles per FOMC meeting in 2007. Continues here

Category: Federal Reserve, Hedge Funds, Really, really bad calls