“Myth: A popular belief or story that has become associated with a person, institution, or occurrence, especially one considered to illustrate a cultural ideal.”
(American Heritage Dictionary)

CFAs out there are undoubtedly familiar with the names “Jacobs” and “Levy”.  The duo literally wrote the book on equity management.  And in the 1980s, they authored several articles for the likes of the Financial Analysts Journal and the Journal of Portfolio Management which contained empirical evidence that strongly questioned efficient markets (e.g. calendar anomalies, value factors).

Perhaps as a result of their belief that markets were inefficient, the two have also had a soft-spot for long/short investing.  In fact, their book, Market Neutral Investing, has been part of the reading list for the Chartered Alternative Investment Analyst (CAIA) designation.

In 1996, before hedge funds became the cat’s meow, they wrote an article on what they viewed as prevailing “myths” about long/short investing (”20 Myths about Long-Short“).  This was a seminal article in the then nascent field of hedge fund investing even if the industry was likely too embryonic at the time to give rise to misconceptions so widespread that they truly qualified as “mythical”.  (A great literary device nonetheless).

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