Posts filed under “Investing”

Today in 1994: Garzarelli Fund Closed

via Jason Zweig:

1994: Remember Elaine Garzarelli, the “guru” at Shearson Lehman Brothers who “called” the Crash of 1987? Her Smith Barney Shearson Sector Analysis Fund, which sucked up $700 million in 1987 from investors dazzled by her forecasting ability, is shut down today as Smith Barney quietly merges Garzarelli’s fund into its Strategic Investor Fund. The reason: Right after she called the 1987 crash, Garzarelli’s crystal ball went splat. Her fund lost 13.1% in 1988, lagging the market by a gaping 29.7 percentage points — and in the fund’s six full calendar years of operation, it trailed the Standard & Poor’s 500-stock index by an atrocious 9.6 points annually.

Source: Lipper Inc.; Morningstar Mutual Fund Sourcebook 1994, p. 1208.

Sorry, Virginia, there is no such thing as a crystal ball . . .

 

 

Category: Investing, Really, really bad calls, UnGuru

S&P 500 Rate-Sensitive Industries

Source: BofA Merrill Lynch   Really interesting chart that shows how the reaction to rate increases are highly variable by industries.

Category: Fixed Income/Interest Rates, Investing, Markets

Single Variable Market Analysis is for Losers

If you work in finance, you will invariably come across an example of single-variable analysis. Almost daily, we see terrible examples of this sort of analytic error, rife with logical weakness, yet offered with the highest degree of certainty. The way this works is as follows: Some ominous data point will be shown, along with…Read More

Category: Analysts, Data Analysis, Investing, Philosophy, Psychology, Quantitative, Really, really bad calls

What Are the Dumbest Investment Ideas of 2014?

In my day job, I see lots and lots of really silly things. Portfolios transfer in filled to the brim with junk, silliness and evidence of malicious intent. I am working on my list of Dumbest Investment Ideas of the Year, but I am curious if any of you have seen anything that stood out…Read More

Category: Investing, Really, really bad calls

Underinvested in US Equities, Overinvested in Hedge Funds

Last summer in Boston, the Trustee Leadership Forum for Retirement Security held its annual meeting at Harvard’s Kennedy School. Trustees and representatives of various state pension funds listened to explanations about the challenges facing endowments and pension funds. The conference is an attempt to explain why so many state pensions are underfunded and underperforming. The…Read More

Category: Hedge Funds, Investing, Venture Capital

How to Make a Killing in Global Warming

Two recent articles with related themes caught my eye. They are important for anyone who manages money, either professionally or for themselves. Together, they may just indicate a turning point in the debate on what might be the response to anthropogenic global warming. The first, from former Treasury Secretary and Goldman Sachs Chief Executive Officer…Read More

Category: Investing, UnScience

Frustrating the Majority

Jeff Saut dug into the archives for this one on Monday: “Money managers are unhappy because 70% of them are lagging the S&P 500 and see the end of another quarter approaching. Economists are unhappy because they do not know what to believe: this month’s forecast of a strong economy or last month’s forecast of…Read More

Category: Investing, Markets, Psychology

. . .and the Cross-Section of Expected Returns

Category: Investing, Think Tank

How to build your own financial dream team

Curate your personal investment resources Barry Ritholtz Washington Post, June, 15, 2014   One question I get all the time from investors is “How do you sift through all of the news, data and media?” thrown at investors each day. I use some time-saving methods to quickly plow through a huge volume of material. If…Read More

Category: Apprenticed Investor, Investing

How to Lose a Billion Dollars in Hedge Funds

Take Apart: Overall, it’s a swing in the financial fortune of one of the country’s top private universities and one of the world’s most esteemed Jewish institutions of more than $1.3 billion, well more than 10 times the losses from the portion of Yeshiva’s portfolio invested with Madoff. Students who applied to and enrolled at…Read More

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