Liquidity Premium Diminishing
Liquidity can be described as the ability to trade a large number of investments quickly, at low costs and when you want to. Because it is a priced risk, liquidity and its associated price effects are an important aspect of...
Fund Construction Matters
“When I hear ‘smart beta,’ it makes me sick.” So said economist and Nobel Prize-winner William Sharpe after he was asked at a conference last year for his thoughts on strategies of this type. And while much, if not the...
Venture Capital ‘Hits’ Driven By Skill
There’s a large body of sound, academic evidence (which is presented in my books, “The Only Guide to Alternative Investments You’ll Ever Need” and “The Quest for Alpha”) demonstrating that, in aggregate, private equity investments have represented the triumph of...
Reputation And Venture Capital
Last week, we recapped some of the more recent literature on the performance of private equity, and venture capital (VC) in particular. The cumulative body of evidence, we found, was damning with regard to venture capital’s ability to provide better...
2015’s ‘Sure Things’ At Halftime
Every January, I put together a list of predictions that financial “gurus” have made for the upcoming year, especially the ones that gain consensus as “sure things.” Through a series of periodic updates, I keep track of whether these “sure...
Poor Active Performance Persists
The midyear 2015 Standard & Poor’s Indices Versus Active (SPIVA) persistence scorecard for U.S. equity markets provides yet another example of why—at least when it comes to the overall results of active management relative to their appropriate benchmarks—the past can,...
Gurus Trip Over Bond/Stock Correlation
A good number of Wall Street “gurus” have, for quite some time now, been loudly and repeatedly warning investors that bond yields will soar. That, they caution, will in turn lead to falling stock prices. Unfortunately, this bit of “conventional...
A Close Look At Neuberger Funds
In this installment of our continuing series on the ability of actively managed fund families to generate alpha, we’ll evaluate the recent performance of equity funds managed by Neuberger Berman to determine if the firm adds value for its investors....
Mythical Emerging Market Returns
The headline of a May article in Investment News, authored by senior columnist Jeff Benjamin, declares: “When investing in emerging-markets economies, stock picking beats indexed exposure.” As regular readers of my work will most likely not be shocked to discover,...
High Growth Countries No Sure Thing
Conventional wisdom can be defined as ideas so ingrained in our belief system that they are accepted without challenge. Unfortunately, much of the conventional wisdom about investing is incorrect. For example, the conventional wisdom that investors seeking high returns should...
