Posts filed under “Psychology”

The Amazing Disconnect Between Hedge Fund Performance & AUM

Earlier this week, Greg Zuckerman of the Wall Street Journal pointed out one of the great mysteries of today’s investment landscape: Despite underperforming by a substantial margin, hedge funds keep attracting more investors and assets under management. It is almost as if (to borrow the headline on Zuckerman’s article), “Hedge Funds Keep Winning Despite Losing.”  He wrote:

Hedge funds aren’t just underperforming against the S&P 500 and other stock indexes. They’re also losing out to low-cost “balanced” mutual funds that hold a mix of stocks and more-conservative investments, just like many hedge funds, suggesting their poor performance can’t be blamed on a hedged approach.

Consider the data: According to HFR, a firm that created indexes to track hedge-fund performance, the average hedge fund gained a mere 3 percent in 2014 versus an 11 percent rise in the Standard & Poor’s 500 Index. That’s hardly worth paying a hedge fund outsized 2 percent management fees plus a 20 percent cut of the profits.

Continues here

 

Category: Asset Allocation, Bad Math, Hedge Funds, Investing, Psychology

Uh-Oh: BusinessWeek Cover Story Nationalism

Now I am engaging in full on selective perception:     Source: BusinessWeek

Category: Contrary Indicators, Financial Press, Media, Psychology, War/Defense

Would you pay $100 million dollars for this Grilled Cheese Food Truck?

If you have been a regular reader of mine, you are probably familiar with several things about me: First, you know I have been a steadfast bull during the entire rise in the stock market. It isn’t that I am such a genius or especially lucky. I just would rather not guess when the bull…Read More

Category: Contrary Indicators, Psychology, Valuation

Both Sides of the Brain (Updated)

Source: Dr. C Daniels ~~~ UPDATE: 1/25/15 Here is the latest scientific thinking, countering the older “left right” analysis:

Category: Psychology, Science

The Where-To-Be-Born Index

Source: The Economist

Category: Data Analysis, Economy, Psychology, Taxes and Policy

Josh Brown: Investment Fads and Themes, 1996-2014

Another year in the books and I’ve updated my Investing Fads and Themes by Year guide accordingly. It begins with 1996 because that was my first summer working on The Street and my earliest exposure to the market. I do this every December because I agree with the eminent philosopher Bob Marley in that “If you know your history,…Read More

Category: Investing, Psychology, Really, really bad calls

Generational Divide

Source: WSJ

Category: Psychology

CUBA Herzfield Caribbean Basin

In the announcement of US potentially normalizing relations with Cuba, the $33 million dollar closed end fund “Herzfield Caribbean Basin” — stock symbol CUBA — popped 40%:   click for ginormous chart   Here are its main holdings:   So much for those theories that investors are rational and markets are efficient . . ….Read More

Category: Markets, Psychology, Really, really bad calls

Folklore of Finance

I really enjoyed this report by State Street, which discusses how often Folklore dominates financial decision-making. Well worth the free download:     click for full PDF of research report Source: State Street Source: State Street

Category: ETFs, Investing, Psychology

Tony Robbins: 2014 vs 2010

  Tony Robbins is out promoting his new book, MONEY Master the Game: 7 Simple Steps to Financial Freedom. Based on who he interviews, I plan on giving it a read over the next holiday break. However, I was a little disappointed in this WSJ video interview with Tony Robbins, dated WSJ 11/19/2014 6:03PM. Within…Read More

Category: Consumer Spending, Economy, Psychology, Really, really bad calls