Comments on: A Quant Approach to Private Equity, kaChing and Covestor http://www.mebanefaber.com/2009/10/22/a-quant-approach-to-private-equity/ Engineering Targeted Returns and Risk Sat, 20 Mar 2010 21:13:21 -0500 http://wordpress.org/?v=2.8.2 hourly 1 By: Links – World Beta – Engineering Targeted Returns and Risk http://www.mebanefaber.com/2009/10/22/a-quant-approach-to-private-equity/comment-page-1/#comment-3731 Links – World Beta – Engineering Targeted Returns and Risk Tue, 02 Mar 2010 19:45:23 +0000 http://www.mebanefaber.com/?p=1881#comment-3731 [...] kaChing is requiring all Geniuses on their platform to register as RIAs – which I think is a great step in the right direction.  I still think the killer app for these guys is to morph into a technology/back office provider to outsource RIA duties which I posted about back in October. [...] [...] kaChing is requiring all Geniuses on their platform to register as RIAs – which I think is a great step in the right direction.  I still think the killer app for these guys is to morph into a technology/back office provider to outsource RIA duties which I posted about back in October. [...]

]]> By: macclary http://www.mebanefaber.com/2009/10/22/a-quant-approach-to-private-equity/comment-page-1/#comment-3049 macclary Fri, 23 Oct 2009 14:55:11 +0000 http://www.mebanefaber.com/?p=1881#comment-3049 I haven't met anyone who hedges their private equity portfolio either. Maybe the thinking is 'hopefully I am in the top quartile or decile, but since I can't know for sure for years I better be bullish on the general market since otherwise I will be loosing money the whole time with static hedging'.<br><br>Meriwether: The one lesson I have learned from reading about famous traders is that their real skill involves selling people on their own investment prowess. As you read the biographies of some of these guys it is just crazy how many wrecked funds and sunk investment companies they leave in their wake! There is always a few hundred million available to fund them again with a new partner ;-><br><br>"The whole problem with the world is that fools and fanatics are always so certain of themselves, but wiser people so full of doubts."<br>-- Bertrand Russell (1872-1970)<br><br>Regarding Peter Matthews' new operation, it is amazing that Mint has succeeded if he just discovered the principles quoted by the journalist:<br><br>“It really means we can’t possibly know what is going to happen in the future,”<br>"...a risk management system rather than a trend-following system..." (Rule #1 don't loose money!)<br>“We look at low risk as such a great thing that we should do a lot more of it and high risk as such a bad thing that we should do almost none of it.” as stated upon the 1 millionth rediscovery of the Kelly criterion ;-)<br><br>If everyone invested this way though utopia would probably be next around the corner! I haven't met anyone who hedges their private equity portfolio either. Maybe the thinking is 'hopefully I am in the top quartile or decile, but since I can't know for sure for years I better be bullish on the general market since otherwise I will be loosing money the whole time with static hedging'.

Meriwether: The one lesson I have learned from reading about famous traders is that their real skill involves selling people on their own investment prowess. As you read the biographies of some of these guys it is just crazy how many wrecked funds and sunk investment companies they leave in their wake! There is always a few hundred million available to fund them again with a new partner ;->

“The whole problem with the world is that fools and fanatics are always so certain of themselves, but wiser people so full of doubts.”
– Bertrand Russell (1872-1970)

Regarding Peter Matthews' new operation, it is amazing that Mint has succeeded if he just discovered the principles quoted by the journalist:

“It really means we can’t possibly know what is going to happen in the future,”
“…a risk management system rather than a trend-following system…” (Rule #1 don't loose money!)
“We look at low risk as such a great thing that we should do a lot more of it and high risk as such a bad thing that we should do almost none of it.” as stated upon the 1 millionth rediscovery of the Kelly criterion ;-)

If everyone invested this way though utopia would probably be next around the corner!

]]> By: RHG http://www.mebanefaber.com/2009/10/22/a-quant-approach-to-private-equity/comment-page-1/#comment-3048 RHG Fri, 23 Oct 2009 12:36:04 +0000 http://www.mebanefaber.com/?p=1881#comment-3048 TMA = Too Many Acronyms. TMA = Too Many Acronyms.

]]> By: brettalexander http://www.mebanefaber.com/2009/10/22/a-quant-approach-to-private-equity/comment-page-1/#comment-3047 brettalexander Thu, 22 Oct 2009 20:47:08 +0000 http://www.mebanefaber.com/?p=1881#comment-3047 Too bad there was not some way to "short" Meriwether. Perhaps an Intrade Market contract should initiated for trading. <br><br><br>Brett Too bad there was not some way to “short” Meriwether. Perhaps an Intrade Market contract should initiated for trading.

Brett

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