Toolkit
Diversification is one of the most fundamental yet misunderstood concepts in investment management. I will begin with a basic and hopefully intuitive discussion of the principles of diversification and the mechanics by which it works. Then, I will provide a… READ MORE ›
Spectral risk measures are relatively new entrants to the field of risk management, with the distinctive feature that they relate the risk measure directly to the user’s risk aversion function. This post discusses the pros and cons of using… READ MORE ›
The holiday season and the turn of the calendar year can create an opportunity for introspection as to how you invest. While one should be just as introspective about wins, it is too difficult for most to separate brilliance… READ MORE ›
Milton Friedman famously opined, “Inflation is always and everywhere a monetary phenomenon in the sense that it cannot occur without a more rapid increase in the quantity of money than in output.” However, the equation of exchange, to which… READ MORE ›
Editor’s note: Though technical, this article gives a good overview of how quantitative methods can be used to improve investment management processes. Even if you don’t follow the math, it will be useful to read through the reasoning.
“Study… READ MORE ›
Lately, academics and investment practitioners have been debating over the justification of investment management fees, hedging tail risks, and whether or not active investing is in fact a “loser’s game”. But before we lose any more sleep over the… READ MORE ›
We were privileged to have Tom Brakke, CFA, stop by our offices in New York City a few weeks ago. After a multi-hour meeting where many of us talked about all sorts of things, I managed to wrangle Tom… READ MORE ›
About a month ago, I wrote about the attractive historical performance of negative enterprise value stocks. This week, I’d like to illustrate some of the… READ MORE ›
Value investing is about finding and buying a bargain, a dollar selling for 70 cents or less. One of the most tantalizing apparent bargains offered by the stock market is the negative enterprise value (EV) stock: a stock that… READ MORE ›
The secret is out! The volatility around a flat performance in the second quarter proved that successful investing is difficult for most equity managers. While the quarter was essentially flat, individual months, weeks, and certain days showed wide up… READ MORE ›