http://www.businessinsider.com/nevsky-capital-clo…
Thoughts on this?
This article seems to agree with my own thoughts, but I don't want to fall prey to confirmation bias. And lol @ the shock that politics > economics". I've always thought that quant funds would make it more difficult for fundamental investors (especially in equities) because they just add so much noise. I mean some of their strategies have no economic basis and there's no way to tell which funds are trading which stocks.
I'm not sure this is a canary in the coalmine. (Nor was Third Avenue.) These guys have done extremely well for themselves and might just be tired of dealing with the bullshit and grinding the past couple years in the market.
"The shock that politics > economics" is the real lesson of Lehman for those who have been paying attention.
Also, I guess I'm a n00b to finance, but isn't a higher cost of capital (aka higher expected return) better for an investor of capital? Or, did the article miss some major points of the actual letter?
Well, they (the managers) are making the point that volatility is higher (there's a shocker). As you point out, returns should be commensurately higher as well. Sounds like they just can't be bothered to deal with the brave new world.
Higher cost of capital = greater required return
Food for thought for sure. #1- The rising importance of both China and India and the lack of transparency of that data are a fact.
I'm not sure about India, but I do not and will never trust a single piece of information coming out of China. Their entire system is a fucking cooked-up shit-show.
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