Doug Cote of start-up manager Schooner Investment Management writes that many 1X0/X0 managers fail to measure whether they are adding excess beta risk.  In response to our musings about translating AllAboutAlpha.com into Mandarin, Cote kindly sends along a Chinese version of his comments. 

Guest posting by: Douglas Cote, Schooner Investment Management  

The 130/30 strategy is a prudent method of employing leverage to a portfolio, contrary to some believing 130/30 funds to be a fad. This strategy will be a significant benefit to investors if implemented and managed properly. 

Clients to this day exude awe of portfolio managers that know how to sell short a stock or group of stocks (I suppose it’s because they can charge higher fees). Quantitative investment managers are uniquely trained to understand shorting mechanics because the models they build are based on the expectation of a symmetric distribution of returns both positive and negative.

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