Dynamic Investment Panel: Alpha Hedge West Conference ~ market folly

Monday, September 23, 2013

Dynamic Investment Panel: Alpha Hedge West Conference

Next up in our series of notes from the Alpha Hedge West Conference is the dynamic investment panel featuring John Claisse of Albourne America, Joy Xu of Verizon Investment Management and Andrew Karsh of CALPERS.

Comments below: JC = John Claisse, JX = Joy Xu and AK = Andrew Karsh

Dynamic Investment Panel: Alpha Hedge West Conference 

MD> Just because you got away with it doesn't mean you didn't take a risk.  Missing 40 worst days more than two times better than getting 40 best days.

JX> Ben Graham said investors need to manage "risk" not "returns".  Risk premium not static.  If you put $1M into market for 20 years each year from '28 to '93, the range of outcomes is between roughly $650K and more than $13M.  Very wide range.  Not losing money is key.  Liquidity is never there when you need it.  Risk premium, not stable, in other words, bonds have frequently outperformed stocks.

AK> $260B in AUM.  Bonds allocated internally.  Real estate and hedge funds managed externally. Goal of 7.5% returns.

JC> Lots of turnover at Board and Trustee level.

SB> Manages about $7B AUM.  Good Harbor Financial.  If they like risk they go equity, don't like risk they go fixed income.  Better to be out of market worst 10 days than in 10 best days.  Is currently 50% stocks and 50% bonds.  Neutral.

JX> They use models or internal management.

AK> Allocates to partners that generates absolute returns vs relative and better dialogue vs normal hedge fund process.

JC> Smaller managers, if they get standard info on active risk taking by global, macro, etc.  They can use that info and insight.

Be sure to check out the rest of our summary of the Alpha Hedge West Conference.

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