Two amazingly simple rules for making alpha/beta allocations
Dec 2nd, 2009 | Filed under: Performance, Analytics & Metrics, Today's Post
We review a lot of academic research here at AllAboutAlpha.com. Some of it can be a little dense and we’re the first to admit that we often can’t follow the mathematical nuance or arcane calculus contained in some of it. Still, we try to distill these papers down to a simple lesson or two that can be communicated in the 5 minutes or so that you have to read our daily posts.
But occasionally, we come across academic-style articles written by practitioners. Not surprisingly, these tend to be a little more, well, practical. Here’s a great example… More…
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These parameters can’t be reliably forecast. Historical values can be calculated, but you need the future value for the investment idea to pay off. Why bother, except that you can fool people with the seeming sophistication, get assets under management, and then disappoint them?
Why bother, except that you can fool people with the seeming sophistication, get assets under management, and then disappoint them?
And your point is?