Comebacks


Tiger Woods' Tour Championship victory has been deemed the greatest comeback story in golf history.  The record TV ratings prove we agree and our love hate meter with Tiger is now firmly in the love camp.  Tiger had not won a professional golf tournament since 2013.  Investors have a love hate relationship with hedge funds that has remained on the hate side since 2009.  This week’s blog will examine what Tiger can teach hedge fund managers and their investors.


Don’t read the press

The press and blogs have a large case of schadenfreude.  Most of their stories have a failure bias not just a political bias.  Athletes and money managers make a lot more money than reporters and the average American.   Our jealous dark side would like to see them come down to our zip code.  Athletes and hedge fund managers need to focus on their successes and not be brought down by the naysayers.  Comebacks are 90% mental.

Fundamentals

Great athletes and great investors have unique talent.  Athletic coaches appreciate talent but live by the maxim that you can’t teach tall.  Investment due diligence professionals understand that you can’t teach consistent investment performance either. Experienced coaches know when an athlete is unique, successful investors know great hedge fund managers are unique.  Judgment and experience are all we can go on to make our final decisions.


Hard Work

Michael Jordan was the last guy in the gym even though he was the greatest player of all time (GOAT).  Great hedge fund mangers are voracious readers.  We recommend reading Howard Marks' book or if your prefer audio listen to Tim Ferriss interview of Mr. Marks about the book.  The athletic facilities and Amazon are open 24/7.  If you want to comeback you need to take advantage of their extended hours.

             
A comeback story catches our attention after we believe the athlete or hedge fund manager has spent enough time in the trough of sorrow to come out with humility.  Tiger spent five years in the trough and hedge fund managers have spent the last nine years there.  We believe that true talent will eventually revert to the mean.  Hedge fund mangers it's time to come out of the trough.           

Comments

  1. Can't comeback unless you stay in the game.

    https://www.bloomberg.com/news/articles/2018-10-03/highfields-capital-returning-money-to-investors-after-20-years?utm_source=twitter&utm_content=markets&utm_medium=social&utm_campaign=socialflow-organic&cmpid%3D=socialflow-twitter-markets

    ReplyDelete
  2. BlackRock seems to agree

    https://www.wsj.com/articles/blackrock-and-its-ceo-are-making-a-private-equity-bet-1539194475

    ReplyDelete
  3. Another negative article on hedge funds.
    https://www.wealthmanagement.com/alternative-investments/retail-investors-alternatives-disappoint?NL=WM-025&Issue=WM-025_20181022_WM-025_954&sfvc4enews=42&cl=article_1&utm_rid=CPG09000007846014&utm_campaign=16834&utm_medium=email&elq2=824efee4dde147c49b7fd549372e4612

    ReplyDelete

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