Increased Volatility Encourages Stock Pickers

The uptick in market volatility over the past 18 months is leading some individual investors to believe the market has “reached a point where picking the right stocks matters more than throwing money into index-tracking funds,” according to a recent article in The Wall Street Journal. The article says that Wall Street analysts are attributing a combination of drivers, including a “buy-the-dip” mentality, an accommodative Fed, solid economic indicators and increased share price dispersion.  They… Read More

Top Stockpicker Steps Off Hedge Fund Stage

An article in Barron’s reports that Steve Mandel–“the most successful fundamental stock picker of them all”—stepped down as portfolio manager of Lone Pine Capital in January. The article notes that Mandel, who was not well-known outside of the hedge fund industry, generated “tens of billions of dollars in gains for his clients over the past two decades and established one of the best investment track records ever.” The article includes praise from Mandel’s peers, including… Read More

Stock-Pickers Know How to Buy, But Not Sell

Most money managers are better at buying than selling, according to an article by Bloomberg columnist Barry Ritholtz. This is the conclusion of a report published in January that concludes: “While investors display clear skill in buying, their selling decisions underperform substantially –even relative to strategies involving no skill such as randomly selling existing positions—in terms of both benchmark-adjusted and risk-adjusted returns.” According to Ritholtz, the paper’s most surprising conclusion is this: “Fund managers would… Read More

Stock-Pickers Beware: Bots Are Here

BlackRock’s March announcement that the firm had reduced its staff of stock pickers to increase its focus on quant strategies may support the consensus that “active management is dying,” but Bloomberg columnist Nir Kaissar argues that “the problem is not that active managers fail to outperform the market; it’s that they keep that outperformance for themselves through high fees.” “Smart beta” index funds, on the other hand, have been able to beat the market at… Read More