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Making Monkeys Out of the Sohn Investing Gurus

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Re: Making Monkeys Out of the Sohn Investing Gurus

#11

Post by koolba »

ericb wrote: post #4
zetazzed wrote: post #3

I'm curious - do any HN readers invest heavily in actively-managed mutual funds or hedge funds where you aren't personally involved? I feel like it has become a widely-held belief among young, somewhat-affluent techies that index funds are the way to go, with some preferring to pick their own stocks and very few willing to pay significant management fees for someone to pick their publicly-traded equities. But maybe I…

> do any HN readers invest heavily in actively-managed mutual funds or hedge funds where you aren't personally involved? I believe 401k's commonly limit themselves to a group of funds and there is sometimes no "index" option, so I would imagine there are people who are in actively managed funds here. On that same score, I find rolling one's funds into an IRA whenever possible (change of companies, acquisition of your…

> On that same score, I find rolling one's funds into an IRA whenever possible (change of companies, acquisition of your employer) to be very helpful!

Having direct control of your assets is generally a good thing. One advantage to rolling your assets from a prior employer's 401k (or your own IRA) to your next employer's 401k is that it allows you to fund a backdoor Roth IRA with the single year's contributions. Otherwise you'd have to convert your entire IRA which could be a large (present day) tax bill.

Re: Making Monkeys Out of the Sohn Investing Gurus

#12

Post by eej71 »

arx1422 wrote: post #7
zetazzed wrote: post #3

I'm curious - do any HN readers invest heavily in actively-managed mutual funds or hedge funds where you aren't personally involved? I feel like it has become a widely-held belief among young, somewhat-affluent techies that index funds are the way to go, with some preferring to pick their own stocks and very few willing to pay significant management fees for someone to pick their publicly-traded equities. But maybe I…

I'll add that some of these sentiments are cyclical. We have been in an environment for the past half decade where the greatest engines of growth were the megacap leading tech companies. When the largest are in the lead like that it is difficult to differentiate versus the indices. Second, this has been a tremendous bull market. In this kind of market nearly every hedge is a bad hedge which doesn't mean it wasn't a v…

Do you feel that your approach beats a common benchmark over a ten year period?

Re: Making Monkeys Out of the Sohn Investing Gurus

#13

Post by arx1422 »

eej71 wrote: post #12
arx1422 wrote: post #7

Earlier quoted context omitted.

I'll add that some of these sentiments are cyclical. We have been in an environment for the past half decade where the greatest engines of growth were the megacap leading tech companies. When the largest are in the lead like that it is difficult to differentiate versus the indices. Second, this has been a tremendous bull market. In this kind of market nearly every hedge is a bad hedge which doesn't mean it wasn't a v…

Do you feel that your approach beats a common benchmark over a ten year period?

Empirically I have outperformed over the past two decades. But lets qualify that the backdrop market environment matters. If the market surges straight up 12-18% a year for years on end I will tend to drag. As a value oriented investor I get less interested when valuations are higher which admittedly can cause underperformance if momentum keeps pushing things up. You can't get off the train too early. I saw too many of my peers think the bull ride was over in 2012/2013 because they got too anchored to post-crisis valuations and failed to see normalized valuations as appropriate.

When the market churns flat I tend to outperform because I have a sizable yield component and my individual name alpha shows its strength. When the market crashed in 2008 I ended up the year on short positions so that really impacts longer run outperformance. In December I went on a shopping spree after being defensively positioned into it which left me much better off than if I had passively been long the whole time.

My point is that no one strategy fits all investing risk thresholds or environments. I like to aim for a nice 7-12%/yr with minimal drawdown volatility and hedges against nasty things happening. I look "stupid" if the market is up 20% in a given year and I am not. Over the longer term nasty things seem to happen every X years which has vindicated the approach thus far.

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