Comments on: The mystery of “slightly positive results” in hedge funds and college basketball http://allaboutalpha.com/blog/2007/11/18/the-mystery-of-slightly-positive-results-in-hedge-funds-and-college-basketball/ Hedge funds, portable alpha, 130/30 and alpha-centric investing Fri, 19 Mar 2010 07:52:26 +0000 http://wordpress.org/?v=abc hourly 1 By: allaboutalpha.com: AllAboutAlpha.com http://allaboutalpha.com/blog/2007/11/18/the-mystery-of-slightly-positive-results-in-hedge-funds-and-college-basketball/comment-page-1/#comment-96812 allaboutalpha.com: AllAboutAlpha.com Fri, 11 Apr 2008 02:31:41 +0000 http://allaboutalpha.com/blog/2007/11/18/the-mystery-of-slightly-positive-results-in-hedge-funds-and-college-basketball/#comment-96812 [...] “Hedge funds come unstuck on truth-twisting”:  Aussie newspaper The Age provides a great example of why AIMA felt compelled to put its foot down on anti-hedge fund hype yesterday. Â The article covers a recent academic study and starts with “Has the hedge-fund industry been built on a series of lies?” and continues on to proclaim, “Now it looks as if the industry might be based on a more systematic falsehood”, “The conclusion? The promise on which the industry was built looks to be largely a false one. If investors start to question the hedge funds’ ability to produce consistently superior returns, they will start to exit the industry in droves - and rightly so.”  (see November ‘07 posting on this study) [...] [...] “Hedge funds come unstuck on truth-twisting”:  Aussie newspaper The Age provides a great example of why AIMA felt compelled to put its foot down on anti-hedge fund hype yesterday. Â The article covers a recent academic study and starts with “Has the hedge-fund industry been built on a series of lies?” and continues on to proclaim, “Now it looks as if the industry might be based on a more systematic falsehood”, “The conclusion? The promise on which the industry was built looks to be largely a false one. If investors start to question the hedge funds’ ability to produce consistently superior returns, they will start to exit the industry in droves – and rightly so.”  (see November ‘07 posting on this study) [...]

]]> By: miami http://allaboutalpha.com/blog/2007/11/18/the-mystery-of-slightly-positive-results-in-hedge-funds-and-college-basketball/comment-page-1/#comment-50583 miami Wed, 21 Nov 2007 19:36:36 +0000 http://allaboutalpha.com/blog/2007/11/18/the-mystery-of-slightly-positive-results-in-hedge-funds-and-college-basketball/#comment-50583 The Penn article was laughably wrong. Vegas does not set unbiased lines. Vegas does not try to attract 'equal action,' known as the Myth of Equal Action among gamblers. Certain teams, like Duke, UCLA, Yankees, ND, etc and large favorites attract more money. The book sets their lines 'higher' to force favorite bettors to pay a 'tax.' Since the line is purposefully higher than a line set merely to attract equal action, favorites don't cover as much. This is all well-known and established in gambling markets. Ask any LV bookmaker, they freely admit it because Duke fans don't stop betting Duke because the line is -22 instead of -20.5. In addition, for really big spreads, it is likely the coach has put the scrubs in. 1st team of the other team can usually narrow the lead on the scrubs. The Penn article was laughably wrong. Vegas does not set unbiased lines. Vegas does not try to attract ‘equal action,’ known as the Myth of Equal Action among gamblers.

Certain teams, like Duke, UCLA, Yankees, ND, etc and large favorites attract more money.

The book sets their lines ‘higher’ to force favorite bettors to pay a ‘tax.’

Since the line is purposefully higher than a line set merely to attract equal action, favorites don’t cover as much. This is all well-known and established in gambling markets. Ask any LV bookmaker, they freely admit it because Duke fans don’t stop betting Duke because the line is -22 instead of -20.5.

In addition, for really big spreads, it is likely the coach has put the scrubs in. 1st team of the other team can usually narrow the lead on the scrubs.

]]> By: Academics Blogs » Blog Archive » Monday links: SIV salvage http://allaboutalpha.com/blog/2007/11/18/the-mystery-of-slightly-positive-results-in-hedge-funds-and-college-basketball/comment-page-1/#comment-50077 Academics Blogs » Blog Archive » Monday links: SIV salvage Tue, 20 Nov 2007 23:54:33 +0000 http://allaboutalpha.com/blog/2007/11/18/the-mystery-of-slightly-positive-results-in-hedge-funds-and-college-basketball/#comment-50077 [...] “When it comes to hedge funds, the bottom line seems to be clear: don’t rely on the “percent positive months” metric when buying a hedge fund…” (All About Alpha) [...] [...] “When it comes to hedge funds, the bottom line seems to be clear: don’t rely on the “percent positive months” metric when buying a hedge fund…” (All About Alpha) [...]

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