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jerryking : beat_the_market   5

Meet the People’s Quant, an Ex-Marine Who Champions Value Investing - WSJ
By Chris Dieterich
June 2, 2017

Wesley Gray’s value-focused fund of overseas stocks is beating all its rivals over the past year. For him, it’s almost beside the point.

Mr. Gray, chief executive of asset manager Alpha Architect LP outside of Philadelphia, says watching short-term market moves doesn’t pay off. Instead, his firm focuses on the benefits of finding and buying a small number of very cheap stocks, and holding them through thick and thin.

Alpha Architect is an upstart active investment manager that tripled its assets last year, a noteworthy performance at a time when traditional stock pickers are struggling with lackluster performance and investor withdrawals. The firm, with $522 million in assets, is among a growing crop of money managers using academic financial and behavioral research, and algorithms, to identify stock bets likely to beat the market.

So-called quantitative investment strategies pulled from academic research have been around for years, popularized by the likes of Dimensional Fund Advisors and AQR Capital Management. Mr. Gray and Alpha Architect aim to deliver highly potent iterations to smaller investors.

Mr. Gray is a former captain in the U.S. Marine Corps who served a tour in Iraq, and later earned a Ph.D. in finance from the University of Chicago Booth School of Business. He says extreme discipline is a crucial component of his concentrated, algorithmic adaptations of classic value investing, popularized by Benjamin Graham and Warren Buffett.

Last year Mr. Gray put out a report, “Even God Would Get Fired as an Active Investor,” concluding that stock-picking foresight alone wouldn’t equip investors to conquer perhaps their most formidable foe: the fear-driven urge to cut losses.....the market is littered with winning strategies that lose their potency over time, and smart-sounding theories that fail outright when put into practice. Moreover, success in investing often leaves market-beating managers awash in fund inflows that quickly outstrip their capacity to generate ideas.

Mr. Gray responds that the research upon which his strategies are based have proved their resilience for years, and that they can be explained by investor behavior. He admits that he has considered the implications of getting too big, a state that he says isn’t imminent but could force unhappy changes on his firm.
alpha  investors  quants  USMC  PhDs  value_investing/investors  asset_management  algorithms  behavioural_economics  quantitative  idea_generation  finance  active_investing  stock_picking  investment_strategies  beat_the_market 
june 2017 by jerryking
An Activist Investment in Whole Foods Exposes Shifting Power on Wall St. - The New York Times
APRIL 25, 2017 | NYT | By ALEXANDRA STEVENSON.

Neuberger Berman has eschewed its nearly 80-year-old tactic of playing nice (i.e. buy and hold stocks, sit back, and hope for the best), turning to the bare-knuckled world of activist investors made famous by the likes of Carl C. Icahn and William A. Ackman. Last year, as Neuberger Berman’s roughly $200 million investment in Whole Foods Market languished, the firm quietly approached some hedge funds and urged them to agitate for change at the high-end grocer. Two weeks ago, Jana Partners took up the fight......Neuberger Berman’s behind-the-scenes campaign to shake up Whole Foods is the latest example of a dynamic that is upending relations between public companies and the big investors that own their stock.....a reflection of the shifting balance of power on Wall Street....Traditional money managers in search of market-beating returns are demanding a seat at the table, turning to activists for help and even employing some hedge fund tricks of their own. And activists, once the black sheep of the investment world, are now accepted as regular, if meddlesome, investors. ....[Activist investors], she added, “[are an] important ‘check and balance’ on management that has lost its way.”....Neuberger Berman executives prepared an inch-thick presentation--a thorough critique--the kind of document usually produced by activists.....failures in how Whole Foods handled its brand development, and to what it said were customer service deficiencies and a poor strategy for distribution......Relations between institutional investors and activists have evolved in recent years, and it is not unheard-of for big investors to support activists who have set their sights on a high-profile company. ..... be careful of what you wish for, Neuberger Berman discovered that utilizing board seats on an underperforming portfolio company can be "expensive and time-consuming.”.....it is less common for an institutional investor to share its work on a specific target with activists in the way Neuberger Berman did with Whole Foods....There is even a term for the interplay: “R.F.A.s” or “requests for activism.”....Institutional investors do not make investments predicated on an activist showing up.
Wall_Street  money_management  shareholder_activism  beat_the_market  hedge_funds  Whole_Foods  Jana_Partners  Neuberger_Berman  institutional_investors  checks_and_balances  Carl_Icahn  William_Ackman  boards_&_directors_&_governance 
april 2017 by jerryking
BlackRock Bets on Robots to Improve Its Stock Picking - WSJ
By SARAH KROUSE
Updated March 28, 2017

The firm is offering its Main Street customers lower-cost quantitative stock funds that rely on data and computer systems to make predictions, an investment option previously available only to large institutional investors. Some existing funds will merge, get new investment mandates or close. The changes are the most significant attempt yet to rejuvenate a unit that has long lagged behind rivals in performance......The author of the company’s new strategy is former Canada Pension Plan Investment Board Chief Executive Mark Wiseman, who was hired last year to turn around the stock-picking business. The effort is the first test for Mr. Wiseman, viewed by some company observers as a potential successor to Chief Executive Laurence Fink......Many other firms that specialize in handpicking stocks are also struggling with low returns and shifting investor tastes. Since the 2008 financial crisis, clients across the money-management industry have moved hundreds of billions of dollars to lower-cost funds that track indexes, known as passive investment funds, instead of aiming to beat the market.
BlackRock  stock_picking  automation  layoffs  asset_management  institutional_investors  ETFs  Mark_Wiseman  Laurence_Fink  CPPIB  robotics  quantitative  active_investing  passive_investing  shifting_tastes  money_management  beat_the_market 
march 2017 by jerryking
Steven A. Cohen’s Newest Bet: Do-It-Yourself Computer Traders - WSJ
By BRADLEY HOPE
July 27, 2016

Steven A. Cohen is betting as much as as $250 million that mechanical engineers and nuclear scientists can come up with market-beating mathematical models in their spare time. He's investing in a hedge fund launched by Boston investment firm Quantopian that provides money to do-it-yourself traders who come up with the best computerized investing methods, giving a share of any profits to the creators.

Mr. Cohen, chief executive officer of Point72 Asset Management LP, is also making an undisclosed investment in Quantopian itself through his family-office venture arm Point72 Ventures.

The billionaire’s new commitments are part of a broader push in the money- management world to embrace quantitative investing, which relies mainly on math-based models to bet on statistical relationships or patterns in stocks, bonds options, futures or currencies......Point72 Asset Management oversees the personal wealth of Mr. Cohen, his family and employees. It already has an internal team devoted to computer-driven trading strategies......Quantopian says it has 85,000 users signed up from 180 countries who have created more than 400,000 algorithms on the company’s free web-based platform. So far, the firm has only selected 10 of those to trade a few hundred thousand dollars on behalf of Quantopian. The platform is only for U.S. equities trading so far, but Quantopian plans to expand to other asset classes.
algorithms  quantitative  Wall_Street  Steven_Cohen  beat_the_market  hedge_funds  DIY  SAC_Capital  money_management  investing  Point72  asset_classes  family_office 
july 2016 by jerryking
WSJ: Galleon and the Trouble With Insider Trading
Jan/Feb 2010 | The Corporate Board | Andy Kessler.

Information now travels at the speed of light. The edge to human traders
is mostly gone, arbitraged out by fast computers.
Near-term blips in stocks will always be driven by those with industry
contacts, legal or illegal. The only way to truly beat the market long
term is to use your head, think out long-term trends, figure out where
productivity and therefore wealth is being created in the economy,
and invest alongside it. This might include investing in wireless commerce, gigabit broadband, personalized prescription drugs, oil shale extraction, or electric smart grids that can better allocate power to where it is needed.
**********************************************************************
[January 06, 2020 |WSJ| Tech Will Rule These ’20s, Too by Andy Kessler]
So what’s next? My fundamental rule for finding growth trends is that you need to see viable technologies today, and then predict which ones will get cheaper and better over time. Microprocessors, storage, bandwidth—all still going strong after half a century.
2020s  alpha  Andy_Kessler  arbitrage  beat_the_market  broadband  commoditization_of_information  hydraulic_fracturing  ideas  insider_trading  JCK  long-term  personalization  power_grid  productivity  productivity_payoffs  Raj_Rajaratnam  shale_oil  smart_grid  strategic_thinking  technology  traders  trends  trend_spotting  wealth_creation 
june 2011 by jerryking

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