Re: Good investing paper on mutual funds and alpha
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I'm surprised there are not more comments. People always want a fairly easy, quick way to make a buck and you can get this info from HF and MF disclosures which are all public, and now all on the web.
90% of investors would do better if they simply looked at MF and HF buys and sells. [either following, or waiting for total puking and then swooping in.]
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the paper is really well done. one quick correction is that the sells aren't nearly as strong as the buys in forcasting future year returns.
looking at strongly performing hedge funds and mutual funds should be able to generate a portfolio that consistently outperforms the market according to this research.
a good sign is that, according to the authors, it seems that the private info that leads to the managers' decisions is a result of fundamental research that persists even after trying to control for a number of quantitative signals and momentum signals.
Barron
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