Friday, July 12, 2024

New movie foresees future of hedge funds

Last updated Thursday, August 22, 2013 10:57 ET

In the future, we won’t pay much for exotic hedge fund betas (risk profiles), but we will pay for superior human intellect.

San Clemente, USA, 08/22/2013 / SubmitMyPR /

< Click Here> to watch this Oscar-worthy movie, and please pass it around. Marvel at the clones clashing with the evil genius in the battle of beta versus alpha. It’s five minutes of futuristic merriment and enlightenment. Gene Roddenberry would be proud of this trek.

In the future, we won’t pay much for exotic hedge fund betas (risk profiles), but we will pay for superior human intellect. We’ll know the difference because we’ll abandon simple-minded performance benchmarks like peer groups and indexes, and replace them with smart science.

Hedge funds, after all, are unique. The definition of unique is “without peers,” which means that a distinctive hedge fund can’t be squeezed into an artificially defined group. Hedge fund managers win or lose against peer groups because they are different rather than because they are better or worse than quasi-comparable strategies.

It’s this uniqueness (heterogeneity) that will lead us in the future to the science of evaluating hedge funds. Our Oscar-worthy hedge fund movie predicts that hypothesis testing and cyberclones will revolutionize due diligence. No one wants or needs to pay for exotic betas that can be reverse-engineered (replicated). In sharp contrast, everyone is willing to pay for that critical factor that can’t be synthesized: superior human intelligence and wisdom that engender profitable decisions by way of savvy investment choices.

Yes, we should be prepared to pay a fair price for brainwork, commensurate with the level of brainwork rather than the typical “2 and 20” fee. But first we’ll need a robust model for deciding who’s truly delivering the equivalent of Oscar-winning performances in the hedge fund universe.

About the Producer of the Hedge Fund Movie: PPCA, Inc., San Clemente CA, provides advanced analytical services to investors and their consultants in the areas of asset allocation, market research, performance evaluation, style analyses and target date funds. PPCA president Ron Surz is a pension consulting veteran. Further information is available at Linked In and www.PPCA-Inc.com and HedgePOD.

About the Creators:
Kathy Tarochione, Harrison AR is a digital artist providing life stories for individuals and their pets – digital memories in pictures and art. She is also the Founder & Partner of Picture A Moment Pet Productions LLC with its Divisions The Canine Community Reporters News & WCCR.TV designed to help animals in shelters. Kathy has mastered digital productions of all sorts. Further information is available on Linked In Jim Bumgardner, Harrison, AR is a professional broadcaster, videographer, marketer, all around nice guy, and Partner of Kathy Tarochione (see links above). Being a true believer in the entrepreneurial spirit and always rooting for the underdog Jim prides himself on his personal philosophy of "If you dream it, I can build it." Further information is available on Linked In and http://www.jimstv.com.