Hedge funds are scary. They are complicated, confusing and risky. If you’re a rich investor — the member of a wealthy family, say, or someone running a big endowment — you need someone to help you pick the right ones and avoid the disasters.I'll not spoil the story by telling the result.
To help you out, we’ve assembled two teams. On the one side we have assembled a highly professional group of investment advisers running a “fund” of hedge funds.
The team will greet you in their beautiful offices on the waterfront in Greenwich, Conn., or maybe Palm Beach. A beautiful secretary will serve you a beautiful cappuccino with just the right amount of cinnamon and nutmeg on top.
The members of your team boasts MBAs from Harvard and Stanford, and resumes packed with blue-chip names from Wall Street. They have wonderful PowerPoint presentations to show you how they will help you manage your money. They will impress you with their strict, “disciplined” investment process. They are tough on “alpha,” “beta,” and risk-management controls. They check out each fund thoroughly.
On the other side we put together a group of monkeys kidnapped from the local zoo. They hang off a tree while we feed them peanuts and bananas.
Which investment approach does better?
Monday, October 31, 2011
Should monkeys pick stock?
Market WAtch writes: