Top 5 Articles from September: Buffett’s Alpha, Damodaran on Growth Investing
1. Chasing Warren Buffett’s Alpha
From 1976 to 2011, Warren Buffett delivered an average annual return of 19% in excess of the Treasury bill rate, versus a 6.1% excess return for the stock market. A new paper by a trio of money managers at AQR Capital Management aims to explain how he does it.
2. Why the Current Account Deficit Helps Explain the Economics of QE3
Yesterday, U.S. Federal Reserve Chairman Ben Bernanke removed all doubt about whether or not the Fed would proceed with QE3. What will be the impact? A careful study of the long-running U.S. current account deficit provides some answers.
3. Gold Investing: What is the “Barbarous Relic” Really Worth?
John Maynard Keynes once famously called gold the “barbarous relic,” suggesting that its usefulness and, hence, it’s value, is antiquated. So the question really is, or should be, is gold useful today? If so, what is its value? And how much should you pay for it?
4. Aswath Damodaran: How Does Growth Investing Measure Up?
In a recently published paper, noted valuation authority Aswath Damodaran examines the discipline of growth investing and, in so doing, challenges the notion that growth investors are simply risk seekers who ignore valuation.
5. Four Key Factors That Every Hedge Fund Investor Should Consider
Simon Lack, CFA, author of The Hedge Fund Mirage, says that the popularity of hedge funds may be unwarranted given the performance history, lack of transparency, high fees, and minimal investors protections. All of these factors, he says, should be weighed carefully before investing.
