Michael Karsch on Risk Management: CIMA Conference ~ market folly

Thursday, March 29, 2012

Michael Karsch on Risk Management: CIMA Conference

Continuing the series of notes from the CIMA Conference (Columbia Investment Management Association), we present Karsch Capital's Michael Karsch talking about risk.

Michael Karsch on Risk Management

Gross exposure is more important than net exposure. When you’re not exposed enough, cut your least conviction shorts. When you’re too long, instead of shorting more, cut your least conviction longs.

Sometimes it’s dangerous to be near other hedge funds. Manage your gross carefully, not just your net. Hedge fund stocks did a lot worse than the market in 2008, so you got hurt both long and short. Just by shorting, more gross, less net, was actually higher risk. He did 100% over last ten years vs. SPX 12% over same time.

For the rest of the notes from the CIMA Conference, head to these posts:

- Dan Loeb: Lessons He's Learned as an Investor

- David Einhorn Question & Answer Session

- Bruce Berkowitz's Basic Checklist for Investing & What He's Learned

- Distressed Investing Panel (Dan Loeb & Daniel Krueger)

- Long/Short Equity Investing Panel (Whitney Tilson)

- Bill Miller on What Stocks He Likes Now

- Bruce Greenwald's Market Comments

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