Does the industry allow you to have 5-7 year horizon investment ideas or is there no more appetite for this with the rise of MMs? Everyone seems to just want relatively quick returns, ignoring the market can stay irrational for long periods.
| +27 | James Fishback | 10 | 3h |
| +21 | Future of L/S | 5 | 3d |
| +17 | Latest blow up / wind down | 25 | 3d |
| +12 | Looking for Fund to Partner With - LMM Activist | 4 | 20h |
| +10 | SM L/S Compensation? | 3 | 22h |
| +9 | Moving from credit to equity? | 3 | 5d |
| +9 | 29 equity partners selling a law firm, and £9M of the £30M is deferred for three years | 0 | 1h |
| +9 | How to prep for credit HF? | 4 | 1d |
| +9 | MMHF Central Execution Trajectory/Advice | 1 | 1d |
| +4 | Jensen Huang | 1 | 14h |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Does the industry allow you to take a 5-7 year, buy and hold view? Yes but these assets and seats are declining.
Will the market capitalize a 5-7 year business plan and allow you to make make money on that? Absolutely.
TBH, the market doesn't really value these "hold 10 years" investors anymore. You gotta perform in 3-6 months or get out. Saying you are a "5-7 year" investor sounds like a fucken copout and you are just hoping for market beta. We want smart people who can predict next month, next week's price action and monetize accordingly. High returns, high sharpe every month, every week, every quarter. "Long term investing" sounds like a synonym for "lazy".
Bro what are you talking about
Clients do not need to pay so called "professionals" 2-20 for them to put money in obvious multibaggers like AMZN, TSLA, NVDA, over 5-10 years.
You’d get laughed out of the room at the least prestigious wealth management firm in Gary Indiana with that take
“Noooo bro you can’t just buy the best compounding stocks of the last decade and achieve 25%+ returns. You gotta be smarter and work towards beta-neutral and just give alpha. They’re just lucky they picked the best stocks and didn’t sell them and makes tons. True investment professionals have to grind over coin flips on what shitco XYZ will do next week relative to shitco ABC. Trust me bro. Let me show you my sharpe ratio and you’ll see, even tho they picked better stocks and had better returns, their sharpe isn’t as high as mine so I am the better investor.”
I definitely see your point, but the other side is - how much alpha has been missed from not holding onto 3-10x assets like Tesla, Bitcoin, Amazon, Netflix of the world. Obviously, now they are crowded trades, but 5-7 years ago they were underappreciated. you don't think the market will capitalize on this opportunity through hiring more longer term investors? I guess at the end of the day is most people don't have patience and like you said want returns now, I guess its just time to adapt.
On the other hand, do I need to pay 2+20 for someone to invest in GOOG and AAPL on my behalf?
you needed to pay 2 and 20 for someone to buy apple and google TEN YEARS AGO. In my view its only a matter of time for the HF market to correct, everyone trying to become the next Citadel or Milennium.
I like this perspective and our homie holdencrystal's as well. As an allocator, I'd defo find it interesting to allocate to both Warren Buffett-type long term compounder PMs and also the short term sifting earnings MMs. I wonder which style should have a bigger weight in this portfolio. I also wonder how the correlation between these 2 styles is - but I'd wager that it's higher than people might think (no matter how wildly different the 2 styles are) cuz it's the literal same asset class at the end of the day.
"As indicated in lable 3.1, market-neutral strategies tend to have low correlation and low betas to the stock market. Thus, their returns are largely independent of stock market fluctuations. The portion of the return unexplained by stock market fluctuations, alpha, should be highlighted. Although alpha is commonly thought of as management skill, it should be emphasized that some portion is attributable to the strategy itselt. Market-neutral strategies are designed to take advantage of pricing inefficiencies in financial markets, and as such, are alpha-oriented.
By adding market-neutral strategies to a traditional portfolio of stocks and bonds volatility, as measured by standard deviation, and systemic risk, as measured by beta, can be reduced without a corresponding reduction in returns. This pleasant paradox suggests that inefficiencies exist in financial markets, and that astute ..."
Dude you're literally on every forum and you have the worst takes of all time. Your comments make it obvious you have zero real finance experience and you just pull random things out of your ass all the time. Not the traits of a good investor. Get off WSO and go read a book. Save everyone else from your idiotic takes please.
If you are talking about people with barely any turnover who hold positions for 3-5 years, I don't think there are many left who truly do that. When it comes to having a LT view (regardless of the investment's actual time frame), that can be fairly common across the board; as mauboussin says, the market is a reflection of short term bets on long term outcomes.
People are saying just buy MSFT AMZN NVDA for 10 years like it is an obvious win, but you can take a look at previous cycles and see what happened when you used that same logic, classic example everyone uses is Cisco in 2000 and how long it took you to break even. The multibagger compounder / punch card approach is intellectually easy to adopt - of course, I am an investor who owns businesses, and other people are just speculators who trade for price appreciation - but in my opinion it sort of trivializes the work that is being done and where the value add is coming from. I mean GOOG has traded in the low 20s multiple range for a decade, a reflection that there has always been some debate over the durability of the company's growth profile. Obviously they have done incredibly well and beaten those growth profile fades, but it is not easy or obvious to make that call, and the volatility you can endure along the way can be very problematic.
This is the only good take on this entire thread
The rise of passive investing has put what you're describing on the fence a bit. People can buy expertly crafted mutual funds, ETFs, etc. in whatever flavor or strategy they would like. If I'm paying 2 & 20 to some assholes who calls themselves "Prudent Alpha Generation Group" or some other stupid hedge fund name, I want alpha damn near immediately. I can buy my own long-term savings vehicles.
Voluptas quisquam rerum tempore. Nostrum sed id incidunt. Aperiam est perferendis deleniti aut dignissimos et. Quasi excepturi ullam in facere et sequi. Culpa omnis quis voluptas ut eius voluptatum tenetur. Tempore et magnam eius porro.
Eum optio commodi maiores earum odio velit itaque repellat. Et aut aperiam quis tempora omnis. In dicta et voluptates doloremque. Et vel ut pariatur provident.
Iure et magni sapiente beatae nemo recusandae iusto. Molestiae quibusdam voluptas et voluptate dolores ipsum laudantium. Et porro voluptatem aut ullam similique. Asperiores aut rem et ipsum non. Autem aut voluptates et facilis quam et. Molestias ea ea aut odio vel.
Et nisi repellendus omnis mollitia hic recusandae. Dolorem et veritatis asperiores. Est illum itaque repellendus soluta eos facere.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...