Showing posts with label @CFAInstitute. Show all posts
Showing posts with label @CFAInstitute. Show all posts

Thursday, May 7, 2015

7/5/15: Hedgies v Buffett Debate: It's Superficial on Both Ends


A heated, if perhaps somewhat esoteric debate has been launched by Dan Loeb of the Third Point hedge fund and Warren Buffett. The debate as to whether or not hedge funds are capable of outperforming the market and whether or not Warren Buffett is a hypocrite.

You can read on this here: http://www.zerohedge.com/news/2015-05-07/dan-loeb-slams-buffett-being-habitual-hypocrite

But what you won't read in the post above is that the debate is superficial at best. The problem is:

  • Warren Buffett's investment style… setting aside his claims about it being Grahamian (aka fundamentals-driven)… is very much hedge fund-like. To see this read my post about what defines Buffett's exceptional returns here: http://trueeconomics.blogspot.ie/2014/10/28102014-buffetts-magic-cheap-leverage.html. Like a hedgie, he takes leverage. Like a hedgie (in very broad sense) he takes activist positions, often outside or beyond the secondary markets and in alternative asset classes, such as PE as well as across undefined time horizons; and like a hedgie, he has 'black box' management style; but unlike a hedgie, he has access to cheap, very cheap funding that is insensitive to time horizon of investments he takes. Finally, like a hedgie of the old, he manages risk well.
  • And the concept of a hedge fund return is, shall we say… too complex to be useful for Buffett's bet/comparative. To see this, follow the thread of links from this, back, across four posts on the topic: http://trueeconomics.blogspot.ie/2015/03/hedge-funds-returns-part-4-to-higher.html

Friday, May 1, 2015

Wednesday, April 22, 2015

22/4/15: Three Strikes of the New Financial Regulation – Part 5: European Banking Union


My latest post on Financial Regulations innovations courtesy of the European Union is now available on @learnsignal blog: http://blog.learnsignal.com/?p=175. This one starts coverage of the European Banking Union.

Sunday, April 19, 2015

Thursday, March 26, 2015

26/3/15: The New Financial Regulation – Part 1: The Financial Transactions Tax


My latest post for LearnSignal blog opens a new series - covering the major financial services regulatory headaches in the works. This week: it is Financial Transactions Tax turn: http://blog.learnsignal.com/?p=166