Factor investing has been around a long time, but it was not until the advent of ETFs and the regulatory requirements for approval that factor investing came to the fore.
Showing posts with label ETFs. Show all posts
Showing posts with label ETFs. Show all posts
Tuesday, June 2, 2015
Tuesday, March 25, 2014
The Art of Short Selling - Preface
The analytical methods of great short sellers are characterized by prodigious analysis attentive to (1) the quality of earnings, (2) quality of assets, (3) and, quality of management.
You are looking for a bad business run by incompetent managers.
The years 1991 to 1993 decimated the population of short sellers. Those years saw the ascendancy of mutual funds, of momentum investing, and of the short squeeze.
(sounds eerily like 2012-2014 with ETFs, momentum investing, and short squeezes)
The simplest techniques work year in and year out - rising inventories, and insider selling.
You are looking for a bad business run by incompetent managers.
The years 1991 to 1993 decimated the population of short sellers. Those years saw the ascendancy of mutual funds, of momentum investing, and of the short squeeze.
(sounds eerily like 2012-2014 with ETFs, momentum investing, and short squeezes)
The simplest techniques work year in and year out - rising inventories, and insider selling.
Tuesday, December 24, 2013
Tail Wagging The Dog
Not sure whether I have mentioned this previously but was thinking about it this morning and figured I'd put the thought down.
Funds flow has all been into indexing and ETF vehicles over the past 3 or 4 years. ETFs are now the primary vehicle for many financial advisor and trader playbooks. This begs the question is the tail wagging the dog.
With investors hitting the ETF vehicle (sector, country, or other) before they worry about the underlying, markets are being buffetted by dull signals. Arbitrage keeps things in place, but the weight of money is coming from the macro side and it seems in keeping with the adage "shoot them all and let God sort them out."
Funds flow has all been into indexing and ETF vehicles over the past 3 or 4 years. ETFs are now the primary vehicle for many financial advisor and trader playbooks. This begs the question is the tail wagging the dog.
With investors hitting the ETF vehicle (sector, country, or other) before they worry about the underlying, markets are being buffetted by dull signals. Arbitrage keeps things in place, but the weight of money is coming from the macro side and it seems in keeping with the adage "shoot them all and let God sort them out."
Wednesday, August 5, 2009
Two Things You've Got To Get Right*
As an asset manager there are two things you've got to get right.
(1) Where is the money coming from?
(2) Where is the money going?
If you have your finger on (1) and (2) then you have a good chance of getting the trend right. And if you get the trend right, then you can make a whole lot of mistakes, and still be a genius.
At a big picture level, the money seems to be coming from Asian Central banks, sovereign wealth funds, and big bank prop desks (with perhaps the prop desks being the most important player).
In the current environment, there are two subtexts. The first is the USD as the engine of the carry trade. And the second is the use of ETFs and commodities as the preferred vehicle and store of value.
* You've actually got to get a lot of things right. But one of the other things you've got to get right is having the acuity of mind to change position should you be wrong. The trick, like most things in life, is having balance.
(1) Where is the money coming from?
(2) Where is the money going?
If you have your finger on (1) and (2) then you have a good chance of getting the trend right. And if you get the trend right, then you can make a whole lot of mistakes, and still be a genius.
At a big picture level, the money seems to be coming from Asian Central banks, sovereign wealth funds, and big bank prop desks (with perhaps the prop desks being the most important player).
In the current environment, there are two subtexts. The first is the USD as the engine of the carry trade. And the second is the use of ETFs and commodities as the preferred vehicle and store of value.
* You've actually got to get a lot of things right. But one of the other things you've got to get right is having the acuity of mind to change position should you be wrong. The trick, like most things in life, is having balance.
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