Top Five Articles from June: Brexit, Damodaran, and Dumb Alpha
1. Dumb Alpha: How to Build an Above Average Hedge Fund
Joachim Klement, CFA, demonstrates a method for beating average hedge fund returns — without the fees. It’s the best dumb alpha can offer: a simple, low-cost investment strategy that outperforms more sophisticated and expensive alternatives.
2. Aswath Damodaran on How to Invest Internationally
Aswath Damodaran believes investors make two common valuation errors when it comes to country risk exposure: They focus on countries instead of companies and obsess over past mistakes. Matthew Borin discusses these and other insights culled from Damodaran’s recent Take 15 interview with Shreenivas Kunte, CFA.
3. Alpha Wounds: Lack of Independent Judgment
Active managers are often viewed as Sherlock Holmes-style detectives gathering facts, interviewing witnesses, and developing theories to inform their investment judgments. In the latest edition of his Alpha Wounds series, however, Jason Voss, CFA, argues that this perception rarely reflects reality.
4. The Brexit Results: What Happened, What’s Next?
The United Kingdom’s official exit from the European Union (EU) will be a long and uncertain process. Article 50 of the Lisbon Treaty governs a departure from the union, but provides few guidelines. Matthew Borin runs through some potential possibilities in the months ahead and provides a reading list for those looking for more background and analysis.
5. What Hungry Investors Really Want from Their Financial Advisers
Investors want what Meir Statman calls “utilitarian benefits.” We know that a diversified, low-cost portfolio is theoretically best, writes Ron Surz, but we’d rather have the amusement and bragging rights of expensive, risky investments like hedge funds and specialized equity managers.
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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.
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