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Jan 23, 2024
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Joachim Klement's avatar

I love that. It's right up there with Mawer's "Be boring, make money" slogan.

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Superstrat3gist's avatar

Thanks a lot for sharing, Joachim ! It'd be interesting to find out to which extent these findings can be transposed into the analysis of PE/VC portfolios, where hyper-connectedness & hoarding are also known phenomena...

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Joachim Klement's avatar

Hard to say, but there is definitely a lot of herding in the VC space and my guess is that GPs that stray from the heard and invest in unfashionable sectors will get better returns.

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Superstrat3gist's avatar

Agreed. In my view your post and the study can also explain why thesis-driven, focused (& smaller ...) funds can outperform larger, generalist entities over the long run.

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UK Lawman's avatar

Useful article. Retail Fund managers can “herd” too: many tend to buy the same stocks regardless of their purported investment style; and some hold 100 stocks which is just a closet tracker.

Now - How do I find a “peripheral” fund manager ……. [Nick Train? Terry Smith?].

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Gunnar Miller's avatar

The reason "The Big Short" was so popular was its view that one has to be eccentric, outrageous, annoyingly (endearingly?) anti-social, or even autistic to make outrageously successful macro bets or short sales to zero. This is a well-worn dramatic trope https://en.wikipedia.org/wiki/Hero%27s_journey ... "Moneyball" is similar. But then everyone goes home from the movie theatre and puts their retirement money in index trackers ;-)

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