Certain things said or done in our industry or said about our industry that have bugged me for years. These 10, which bother me the most, are held together by only three characteristics: (1) They are about investing or finance in general, (2) I believe they are commonly held and often-repeated beliefs, and (3) I think they are wrong or misleading and they hurt investors.
- The idea that “volatility” is for misguided geeks.
- Bubbles, bubbles, everywhere, but not all pop or sink.
- Using three- to five-year evaluation periods.
- The idea that we will — or should — find one culprit for the financial crisis.
- I would politely request that people stop saying these things:
a. “It’s a stock picker’s market."
c. “There is a lot of cash on the sidelines.”
- Active managers who criticize active management (other than their own).
- Hedge funds that don’t hedge.
- The rolling brouhaha over “high-frequency trading.”
- Antediluvian dilution deception and the still-lying liars.
- Advisors who say it is better to own bonds than bond funds.
I am not so arrogant that I dismiss the idea that I also have some crazy notions that might make another’s list of peeves and that I could benefit from reading it. Also, although I will admit to nothing, I have certainly made some of these mistakes, and whatever lessons I’ve learned have often come from experience — not before-the-fact superior reasoning.
The information contained herein is only as current as of the date indicated, and may be superseded by subsequent market events or for other reasons. The views and opinions expressed herein are those of the author and do not necessarily reflect the views of AQR Capital Management, LLC, its affiliates or its employees. This information is not intended to, and does not relate specifically to any investment strategy or product that AQR offers. It is being provided merely to provide a framework to assist in the implementation of an investor’s own analysis and an investor’s own view on the topic discussed herein. Past performance is not a guarantee of future results.