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Nevada’s public employee pension fund invests passively and beats peers (2016)

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Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#191

Post by archagon »

financltravsty wrote: post #167
emacdona wrote: post #104

To any fund manager out there that truly believes you can beat the market, here is how you can sell me your fund: We agree on an index and a time frame. You guarantee me the same return as the index within that time frame. If you beat the index, you keep 90% of returns ABOVE the index (and I get 10%). We both win, and you win big. If you don't beat the index (within the time frame), you make up the difference (so I g…

You are not an UHNW individual/institutional investor, so no "fund managers" of any note are going to waste their time on this wager. "Beating an index" is really easy. Up to $10MM you can choose most any financial instrument class in the U.S markets and have a good probability of finding alpha for a long time (that would beat the S&P500 18.40% YTD). Many proprietary trading firms, or market makers, or quantitative t…

What are “hyper-growth strategies”?

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#192

Post by deepnotderp »

Whenever the topic of index funds come up, people should remember:

1. The benchmark for hedge funds is not the sp500, it’s the bond market

2. Because the sp500 is inherently a bet, that America’s top few companies will perform well. This is not a purely risk free, hands off bet.

If you bought the Japanese Index fund, the Nikkei, even today it hasn’t returned to its 1980 peak

You might say “I’ll just get a global index”- in which case congrats, you’ve underperformed hedge funds!

3. There are more factors than just investment returns- ie volatility (Sharpe), drawdowns, etc

So despite what HN seems to think, the hedge fund industry is not in fact, full of idiots.

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#193

Post by danielmarkbruce »

gizajob wrote: post #33
danielmarkbruce wrote: post #20

Earlier quoted context omitted.

It's sort of self evident - if you are freakishly capable of spotting mispriced securities in a market full of smart hard working people who are paying attention, you can do better than average. If you aren't freakishly capable... you cant. It's sort of like "does playing pro golf make sense?".

They’re only mispriced until they’re not though, or they’re priced well until they’re suddenly mispriced. That is the say the market is an evolving system varying on the time axis - that things are mispriced assumes that time isn’t rolling along and new events don’t happen and new information doesn’t arrive. Everything’s price today is just a guesstimate until tomorrow’s guesstimate following some new data. Granted i…

The fact they are mispriced then not mispriced at a later time is almost the entirety of the reason one has the potential to make better than average returns.

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#194

Post by santoshalper »

deepnotderp wrote: post #192

Whenever the topic of index funds come up, people should remember: 1. The benchmark for hedge funds is not the sp500, it’s the bond market 2. Because the sp500 is inherently a bet , that America’s top few companies will perform well. This is not a purely risk free, hands off bet. If you bought the Japanese Index fund, the Nikkei, even today it hasn’t returned to its 1980 peak You might say “I’ll just get a global ind…

I don't think most of us think the hedge fund industry is full of idiots. Speaking only for myself, I think it's mostly full of grifters.

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#195

Post by toomuchtodo »

emacdona wrote: post #104

To any fund manager out there that truly believes you can beat the market, here is how you can sell me your fund: We agree on an index and a time frame. You guarantee me the same return as the index within that time frame. If you beat the index, you keep 90% of returns ABOVE the index (and I get 10%). We both win, and you win big. If you don't beat the index (within the time frame), you make up the difference (so I g…

https://longbets.org/362/

> “Over a ten-year period commencing on January 1, 2008, and ending on December 31, 2017, the S&P 500 will outperform a portfolio of funds of hedge funds, when performance is measured on a basis net of fees, costs and expenses.”

Predictor: Warren Buffett | Challenger: Protege Partners, LLC

https://longnow.org/ideas/warren-buffett-wins-million-dollar... (“Warren Buffett Wins Multi-Million Dollar Long Bet”)

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#196

Post by kgwgk »

deepnotderp wrote: post #192

Whenever the topic of index funds come up, people should remember: 1. The benchmark for hedge funds is not the sp500, it’s the bond market 2. Because the sp500 is inherently a bet , that America’s top few companies will perform well. This is not a purely risk free, hands off bet. If you bought the Japanese Index fund, the Nikkei, even today it hasn’t returned to its 1980 peak You might say “I’ll just get a global ind…

> 1. The benchmark for hedge funds is not the sp500, it’s the bond market

There is not _a_ benchmark for "hedge funds" as they are not really _a_ thing.

In some cases S&P 500 may be an appropriate benchmark. Unless Bill Ackman is not a true hedge fund manager, I guess. "In 2023, Pershing Square’s 20th year, Pershing Square Holdings generated strong NAV performance of 26.7% versus 26.3% for our principal benchmark, the S&P 500 index."

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#198

Post by dukeofdoom »

ProjectArcturis wrote: post #158
emacdona wrote: post #104

To any fund manager out there that truly believes you can beat the market, here is how you can sell me your fund: We agree on an index and a time frame. You guarantee me the same return as the index within that time frame. If you beat the index, you keep 90% of returns ABOVE the index (and I get 10%). We both win, and you win big. If you don't beat the index (within the time frame), you make up the difference (so I g…

The point of actively managed funds is not so much to "beat the market", it's to provide diversified returns via strategies that are uncorrelated with the market. On average, the S&P500 has returned about 7% annually. If I had a strategy that returned 5% on average but was totally uncorrelated with the S&P, then you'd get the best overall long-term returns (maximize the geometric average of annual returns) by investi…

Is the 7% post inflation?

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#199

Post by dv_dt »

trpotter72 wrote: post #189
dv_dt wrote: post #161

Earlier quoted context omitted.

Well then you could establish a simiar pay critera that beats the s&p 500 during recessionary moves of the index. Im guessing you wouldn't get many takers

Uncorrelated returns is the key here, not inverse.

So how would you quantify non-correlation? I mentioned recession events because thats a significant movement when you most want to avoid correlation.

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#200

Post by darkwizard42 »

dukeofdoom wrote: post #198
ProjectArcturis wrote: post #158

Earlier quoted context omitted.

The point of actively managed funds is not so much to "beat the market", it's to provide diversified returns via strategies that are uncorrelated with the market. On average, the S&P500 has returned about 7% annually. If I had a strategy that returned 5% on average but was totally uncorrelated with the S&P, then you'd get the best overall long-term returns (maximize the geometric average of annual returns) by investi…

Is the 7% post inflation?

No, it is likely the rate of return. There is generally no such mention of inflation in investment returns. The alternative to investing your dollar is to put it in a treasury (inflation tracked), so you can compare the value of your money against that as the lowest risk (the US defaulting) vs. other forms of risk.
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