Tag Archive 'alpha'

A “common sense approach for those who believe in active management”

Lance on May 05 2008 | Filed under: Alternative strategies, benchmarks

That is All About Alpha’s assessment of 130/30 funds (definition here.) Which seems about right to us.
Few active managers, even if they actually outperform their benchmarks, can overcome the expenses associated with doing so. The reason is not necessarily that they cannot do a good enough job of picking investments that can outperform, but that [...]

No Comments »

Does the “wisdom of crowds” produce alpha?

Lance on Feb 10 2008 | Filed under: Around the Web

AllAboutAlpha asks if the wisdom of crowds produces an alpha? Too soon to tell, though his thoughts on why it isn’t really a wisdom of crowds approach seem dead on to me.
Actually, what it really made me think is, wouldn’t it be cool to be up there on that panel? Alas, I suspect my little [...]

No Comments »

Alpha vs. Beta

Lance on Feb 06 2008 | Filed under: Asset Allocation, Great Investors, indexes

One of my favorite people to read is Rob Arnott, who never ceases to examine every truism, shibboleth and academic orthodoxy in the field of finance. What are alpha and beta? Why and when is it important to distinguish between them.
All About Alpha reviewed some of his points a little over a year ago, and [...]

No Comments »

Index Alpha

Lance on Feb 03 2008 | Filed under: Hedge Funds, benchmarks, indexes

Index investing is often described as “passive” or “beta” investing. However, one thing that is often looked past is exactly how active the construction process of indexes is in practice. Steve Galbraith used to say when I, and he, was with Morgan Stanley (before he went to manage money with Maverick Capital) that buying S&P500 [...]

No Comments »