One time I was with a colleague in Japan interviewing managers. My colleague Patrick knew his way around Tokyo, well, somewhat, so we only spent 25% of the time lost instead of the usual 50%. This was early 2006 when Japanese hedge funds were facing a particularly horrible time. The January and February losses on [...]

One time I was with a colleague in Japan interviewing managers. My colleague Patrick knew his way around Tokyo, well, somewhat, so we only spent 25% of the time lost instead of the usual 50%. This was early 2006 when Japanese hedge funds were facing a particularly horrible time. The January and February losses on [...]

In the investment business, the need to distinguish between skill and luck is very important. But why?
I am in the investment business. My job is to find and invest with fund managers whom I consider to be good investors. But what makes a good investor? This is a lengthy subject which has been dealt with [...]

A word about alpha and betas in investment returns
The Math
In mathematics, half the problem is giving things names. The investment management industry has borrowed a naïve model, applied it to very complicated problems and then expect to make sense of the results.
What is alpha and what are betas?
The terms alpha and beta come from the [...]