So, guys, I agree with what you are saying but you have to appreciate modern portfolio theory. Yes, many assumptions may have been proven to be shaky at best but we do not have much of an alternative. Yes, you can be a pure stock picker/sector allocator, but by doing that your "risk profile" will be raised enormously to such an extent that no funds will be given to you to manage. Even though people will say they look at absolute performance, but these pension funds will cite terms like your alphas, betas and more importantly your R2 - all having to do with your risk profile, your risk taking to generate your returns. So, we all can laugh at why a -30% return is better than -40%, but it will put you in better framework when you appreciate the overall interacting factors.
p/s photos: Maki Nishiyama
Those who were shorting financial stocks are UP by 30%, easily... so being -30% is not such a great achievement... Though I don't know if those rules allow that.
Anyhow, I'm pretty sure you're out of the running to win this thing... the leaderboard are definitely all showing strong gains.
9:18 PM
jason,
i am not running the fund as a hedge thing... i am trying to be near fully invested and still beat the S&P500...
yes, you may notch gains of 20% or even 30% when the index is down 40% but that would have involved huge stock or sector bets, e.g. shorting financials ETF etc... thats one way to run a fund
i am using the fund to match wits with the S&P500, not looking at absolute returns per se... if I was, I would be all cashed up from August till now... 0% would have beaten the mkts by 41% but that would have been senseless.
9:44 PM
Muahahahahahahahahahahha
It's this what it have become of?
To lose less is to be considered good?
No wait.... wait...
The (un)holy trinity (subprime, us consumer and china) is playing out right.
Then maybe you will just lose 80% and S&P lose 90%, and you are still good. any may they give you a million dollar fund manager job.
hoocoodanode?
10:45 PM
ikan,
u can laugh but thats portfolio mgmt... ask any fund manager... u just have to beat the index, u r judged by being fully invested... i told u its quirky but thats the way the dice rolls...
if the index is down 10%, for you to make +40%, you would have to shy away completely from a balanced portfolio... you would have had to make huge sector or stock bets, e.g. put 70% in KNM...
I am not saying that is wrong, that is a genuine stock picker model, if u can do that well, go be a hedge fund guy... but if you r managing a proper portfolio using modern portfolio theory, you basically aim to beat the index, based on the premise that:
over the long run stocks offer superior returns (we now know how silly that assumption is)
hence if you consistently beat the index, over the long run, you should have superior returns (we also know that is not entirely true)
we can laugh at modern portfolio theory n ask them to chuck the textbooks... thats like telling you son not to get business degrees cos they teach u shit... but you still send yr kids to college cause thats the way things are done...