Mutual funds things they don’t disclose

This is a nice summary of the flaws in many mutual funds published on Market Watch. Too many mutual funds are simply index fundsimages disguised as something else. And most of the rest are simply attempts to market a product that isn’t designed to actually add value (but sounds fancy enough to accumulate assets). If you missed John Bogle’s discussion on the flaws in the mutual fund industry you should watch it here.

The 10 things via Market Watch:

1. “Cheap funds often outperform pricey ones.”

2. “We can’t beat the market.”

3. “When skill fails, we just double (or quintuple) our odds.”

4. “People aren’t buying our product…” Continue reading “Mutual funds things they don’t disclose”

Study on Hedge Funds to allow advertise or not

YanLu, David K. Musto and Sugata ray published a paper under the heading “Alternative Marketing for Alternative imagesInvestments” . Hedge funds are currently banned from advertising. New legislation contemplates lifting this ban, thus raising the question of whether the ban is good policy. The Paper address this question by analyzing a form of indirect hedge fund advertising that already exists: advertising by institutions running both hedge funds and mutual funds, where the ads promote either the overall institution or specific mutual fund products. The Paper find that institutions increase such advertising after hedge fund flows sag, and that such advertising predicts subsequent increased inflows for hedge funds. Continue reading “Study on Hedge Funds to allow advertise or not”

10 Things that MUTUAL FUNDS Don’t share with you

This is a nice summary of the flaws in many mutual funds published on Market Watch. Too many mutual funds are simplyimages index funds disguised as something else. And most of the rest are simply attempts to market a product that isn’t designed to actually add value (but sounds fancy enough to accumulate assets). If you missed John Bogle’s discussion on the flaws in the mutual fund industry you should watch it here.

The 10 things via MarketWatch:

1. “Cheap funds often outperform pricey ones.”
2. “We can’t beat the market.”
3. “When skill fails, we just double (or quintuple) our odds.”
4. “People aren’t buying our product…” Continue reading “10 Things that MUTUAL FUNDS Don’t share with you”

Merger Arbitrage

My question is about arbitrage (tenders and merger arb). I’ve been reading through Buffett’s old letters and in the late images1980’s he had quite an impressive run with his arbitrage investments (I think in 1987 he made around 80% on his arb investments).

Both he and Graham seem to have had long time success for decades using merger arb and other arbitrage techniques. I’m wondering if you ever employ any of these strategies in your portfolio? It seems like a specialized area, but also seems like an area that would add uncorrelated returns to the portfolio, and serve as a great substitute for cash when markets begin to become overvalued. Continue reading “Merger Arbitrage”

What are Hedge Funds –

Hedge fund is a type of private and unregistered investmentpool that employs sophisticated hedging and arbitrage imagestechniques in both domestic and international markets  to generate high returns. Traditionally Hedge funds have been limited to sophisticated, wealthy investors because they required a large initial investment.

Earlier most of the hedge funds strategies such as leverage, long, short and derivative positions were focused on corporate equity markets. But now hedge funds new focus areas are commodities and money markets. Because hedge funds are unregistered, they can use  securities and strategies that are either prohibited or restricted in registered funds. That  is why –hedge funds are also referred Continue reading “What are Hedge Funds –”