As an inveterate collector of statistical oddities, I was struck by some intriguing data on rebalancing that came out at a recent investment symposium organised by the US fund management group Vanguard. Rebalancing is one of the aspects of portfolio management that has strong theoretical justification, but is not, so I have always suspected, as easy to implement – or to justify to clients – as it should be.
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Notes And Quotes 22 May 2010
Who said? “While the crash took place only six months ago, I am convinced that we have now passed through the worst – and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us”. (Quoted by Howard Marks of Oaktree Capital, May 2010). No, it wasn’t Barrack Obama, or Gordon Brown. It was President Herbert Hoover in 1930. We know what happened next. A reminder that premature optimism can be dangerous.
The News From Warren Buffett
It is nineteen years since I attended my first Berkshire Hathaway annual meeting and heard Warren Buffett pronounce his views on the investment markets. It is a measure of how long ago that is that the attendance that day was around 250 people and failed to fill the local Omaha theatre. This weekend the same event, it is reported, was attended by 40,000 shareholders and filled the local convention centre to overflowing.
Beware The Marble Halls
Two years ago I wrote a column in the Financial Times about the life and career of Sir John Templeton, the professional investor and philanthropist who had died a few weeks earlier. In the course of the piece I mentioned in passing a memo that he had written to colleagues at his investment advisory firm in the early 1950s on the subject of How To Keep A Client Happy.
Where Economics Fails
A remarkably distinguished group of economists gathered last weekend for the inaugural conference of the Institute for New Economic Thinking, an initiative of George Soros. They were soul searching over the failures of economics in the recent crisis. Such failures are most evident in two areas: the inadequacies of the efficient market hypothesis, the bedrock of modern financial economics, and the irrelevance of recent macroeconomic theory.
Madoff And The Whistleblower
What are the lessons of the Madoff scandal? The more that comes out about this incredible story, the more complex and intriguing it becomes. Harry
Jonathan Davis 