Lee Cooperman, founder of hedge fund firm Omega Ad-visors, last month gave a presentation entitled, “Observations regarding: life, hedge funds, the investment outlook” at Roger Williams University. Here are some of the highlights:
On Hedge Funds
- If you produce the returns, you’ll grow. What separates the men from the boys is how you do during periods of adversity
- He again detailed his characteristics of an outstanding analyst or portfolio manager
- He tries to make money in 5 ways: market direction, asset allocation (stocks versus bonds), undervalued stocks on the long side, sell stocks short. and macro investing (and he candidly mentioned the egregiously high fee structure that hedge funds use as well) View full article »
When you read history, you tend to read about historical events, about numbers, dates, and data. But it was people who drove those events, people making decisions on the basis of uncertain information, unknown consequences and frequently in the ‚fog of war. The opening quotation in Ahamed’s book is from Benjamin Disraeli: Read no history – nothing but biography, for that is life without theory. This perfectly sets the tone for what for me is one of the best treatments of the Great Depression I’ve ever read.
This account differs from others because it is told largely fromthe vantage points of the four central bankers of the four largest economies of the day: Benjamin Strong at the New York Fed, Hjalmar Schacht of the German Reichbank, Montagu Norman of the Bank of England, and Emile Moreau of the Banque de France. View full article »
Investing in the stock market is a bit counter-intuitive. It would seem that the investor that puts in more time and effort managing his investments should have an edge over other investors. However, this extra effort actually can create serious problems. A more hands-off strategy typically works out better for most investors. This is the power of passive investing.
Active vs. Passive Investing
An active investor is trying to get above average market returns by constantly buying and selling stocks. He hopes to find the most profitable stocks on the market through research and market timing. The problem with this is that only half of investors in the stock market can be above average each year. If your picks go wrong, you can earn less than the average return of the market. View full article »
What determines the shape of the zero curve? Why is it sometimes downward sloping sometimes upward sloping and sometimes partly upward sloping and sometimes partly downward sloping?
Lot of theories have been proposed but the simplest one is the expectation theory which conjectures that long-term interest rates should reflect the expected future short-term interest rates. More precisely, it argues that the forward interest rates corresponding to a certain future period is equal to the expected future zero interest rate for that period. View full article »
When ever a stock is bought it is the temptation and hope but not the fear.Many times the trade is made without much of analysis no matter what the stock did in the past its assumes a new life once an investor owns its, and he looks forward to a rosy future. But these simple expectations become complicated by what actually happens, its is greed which raises new doubts, new concerns, and conflicts and we wait for more profits and this waiting turns a profitable trade in to losses.So a psychic dilemma with ego, id, superego turn the situation in a state of constant battle.
Lesser profits are better than no profits or losses. Control greed and take rational decisions about exiting the stock. The execution is more important than reading or writing. View full article »