Two things come to mind when I read this article. First, how fortunate we (faculty and staff at Sacramento State and elsewhere) to have access to the annual FAME conference at San Francisco State university. Several years ago we were able to watch Donald Yacktman present Valuing Stocks as Bonds:

https://efficientminds.com/seminars/2013-fame-v-conference-notes/

Why does this come to mind? Yacktman Asset Management at the time managed $13.7 billion with 9 people. Jabre mentioned in this Bloomberg article, in contrast, managed $1.2 billion with 40+ employees in April 2018. We were (are) fortunate to hear from some of the best in the business.

The second thing that came to mind is what Mattie Von Turk, retired finance professor from U.C. Berkeley, told me during Berkeley’s CDAR Symposium: market efficiency is not an absolute truth, rather, it is a benchmark to judge asset manager performance. As such, “beating the market” on a risk adjusted basis net of fees is hard work.

In the Bloomberg article below we see a growing list of experts in the field exiting the hedge fund business due to difficulties in achieving superior risk-adjusted returns net of fees.

I’ll add to what Mattie told me: yes, beating the market is hard work. You’ve got to work harder and smarter than the market participants to be successful at this game. Or just buy index funds. 🙂

Enjoy the journey,

-Dr. Moore

Another Hedge Fund Veteran Is Quitting a Brutal Market
https://www.bloomberg.com/news/articles/2018-12-13/hedge-fund-jabre-capital-to-return-capital-to-investors-jplw0j14