The Hedge-Fund Investment Puzzle

The following originally appeared in the The Wall Street Journal: If hedge funds are as bad as the headlines would have us believe, why do sophisticated institutions keep investing in them? Anyone glimpsing headlines lately knows that hedge funds are accused of causing the Cooper Union college endowment to fail, are underperforming and overcharging, and… Read More

Defense Wins Investing Championships, Too

The following post originally appeared on Every serious sports fan knows that “defense wins championships. The Ravens and the Tide are famous for it. In the NBA, all three of the top scoring teams were easily eliminated early in the playoffs by more defensively-minded squads. Great pitching beats great hitting. You knew that, but… Read More

Hunting Big Game (And Gains)

This piece originally appeared on When people hear “hedge fund” or “alternative investments,” many conjure up exotic strategies aimed at amazingly high returns. Well, as Sportin’ Life sang, it ain’t necessarily so. As discussed in earlier columns, some alternatives aim for higher current income; others, to avoid losses; and as we’ll see tomorrow, many… Read More

Play It As A Recovery Or A Bubble? Both.

This piece originally appeared on Recovery or bubble? Stock and housing prices are rising, but the real economy refuses to play along. The Fed’s history-making liquidity gambit may have induced a impressive revival … or a false spring that merely delays the true reckoning for decades of too much debt. Which is it? I… Read More

An Inefficient Market Hypothesis

My understanding of the “efficient market hypothesis” is that all information is already “priced in” to the market and that only new information that is different than expectations can move markets. I’m not sure which is funnier, that at one point I was willing to believe that, or that a lot of people a lot smarter… Read More

Emotional Investing and Managed Futures Performance

As is the case in every asset class under the sun, managed futures investors love to chase performance. The sustainability of a strategy often comes second to double or even triple digit returns. We do our best to discourage such decision making, because in our experience, this is uniquely damaging in managed futures allocations. The… Read More