At the end of September, another hedge fund titan called it quits, continuing a trend since the global financial crisis began in 2008. Whitney Tilson, a well-known name on Wall Street, announced the closure of Kase Capital Management because in his own words, “Reporting sustained underperformance…was making me miserable.” Just ten years ago, Tilson was one of the hottest names in the hedge fund arena, having outperformed the S&P 500 by more than 100% since his fund opened its doors in the ... [Continue Reading]
Articles and resources related to Active Management.
This week’s recommended reading comes with an experiment. Find a coin and flip it until it lands on heads three times in a row. Go ahead, we’ll wait. It’s not easy to do. Everyone will have a different experience, but if we conducted this experiment with a large crowd we’d find that most people would require eight attempts before succeeding. We know this because the probability of flipping a coin and it landing on heads is 50%, and if we repeat that probability three times, we find that ... [Continue Reading]
The first half of 2016 was quite a wild ride. Markets kicked off the year with their worst start in history. Then, after bottoming out on February 11 they rebounded strongly, with the S&P 500 rallying nearly 20% off the lows. This type of volatile market is what stock pickers and market timers dream about. The extreme highs and lows provide opportunities for opportunistic buying and selling--the perfect environment for the most competitive managers on Wall Street. As we review performance ... [Continue Reading]
Scan the financial headlines and each day you can find plenty of press on supposed stock market prophets who have found "under-priced" stocks and have taken advantage of them. Anyone who has a career as a stock picker thinks they can do this, and everyone wonders why they can't be the next Warren Buffett. As pointed out in this article, an important fact to consider is that just 4% of actively managed stock funds outperformed the S&P 500 in each of the past four years. In “Can You Pick the ... [Continue Reading]