Active Versus Passive Management May15

Posted by & filed under Hedge Fund Performance, White Papers/ Thought Pieces.

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Not to state the obvious but…beating the market is hard. Really hard! It seems that every financial publication has already emphasized how passive investing has won the race for assets and returns. The idea that investment managers cannot beat the index has become an investing truism; that the single best choice for most individual investors, wishing to gain market exposure, is simple low-cost indexing. In fact, legendary investor Warren Buffett advocated this very idea in his most recent annual newsletter

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Free Cash Flow: An Upgrade to Management Reporting Feb17

Posted by & filed under Hedge Fund Performance, White Papers/ Thought Pieces.

3D illustration of a folder tab with the text cash-flow. Accounting concept. Horizontal image.

The general connection between a company’s profits and its stock price is well established. However, both over the short and long run, that degree of connection is not as robust as investors might hope. Clearly, many factors influence individual stock prices: dividends, revenues, and balance sheets among the obvious. While generally the case, these other metrics do not necessarily move in lock step with profits, particularly over shorter horizons. Still, most studies show that profits are the most influential of these factors on stock prices

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Blue Chip Investing: Exploiting the Rise of Passive Index Funds Jan13

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Decades ago, Benjamin Graham explained the stock market was like a voting machine in the short run. It tallied which companies were popular and unpopular based on investor sentiment. That sentiment or conviction was based on some sort of fundamental or technical rationale. In the long run, however, Graham said the stock market was like a weighing machine. It assessed the substance of a company’s business performance; rewarding winners and punishing losers. At least, that’s the way the stock market used to work

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Another Take On ‘A Modest Proposal’ Jan9

Posted by & filed under Hedge Fund Performance, White Papers/ Thought Pieces.

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Much has been written over the past several years dissecting reasons for the disappointing results of the hedge fund industry overall. Critics decry mediocre returns, the tendency to lag the overall market, and steep fees. What most critics fail to point out, however, is the lack of usefulness in focusing on aggregate hedge fund performance. With hedge funds currently numbering somewhere north of 14,000, the array of investment choices a buyer of such funds might make is staggering. But the vast majority of these hedge funds have, for reasons good or bad, failed to live up to their hype

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