Comments on: Illegal alpha http://blogs.reuters.com/felix-salmon/2009/12/01/illegal-alpha/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Phox http://blogs.reuters.com/felix-salmon/2009/12/01/illegal-alpha/comment-page-1/#comment-9549 Thu, 03 Dec 2009 09:40:06 +0000 http://blogs.reuters.com/felix-salmon/2009/12/01/illegal-alpha/#comment-9549 Markets are largely driven by sentiment, enabling stocks to be bought at too-low lows. Nothing illegal in that.

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By: Homechef http://blogs.reuters.com/felix-salmon/2009/12/01/illegal-alpha/comment-page-1/#comment-9463 Tue, 01 Dec 2009 23:06:21 +0000 http://blogs.reuters.com/felix-salmon/2009/12/01/illegal-alpha/#comment-9463 CAPM is of limited usefulness? For evaluating individual investments, yes. But for understanding investment strategy, it’s powerful and very useful – more to understand what not to do, and what won’t work.While I wouldn’t suggest that alpha is evidence on its own of illegal activity, I certainly don’t feel sorry for anyone who did lose money when they were promised alpha.

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By: lucretius http://blogs.reuters.com/felix-salmon/2009/12/01/illegal-alpha/comment-page-1/#comment-9452 Tue, 01 Dec 2009 20:48:52 +0000 http://blogs.reuters.com/felix-salmon/2009/12/01/illegal-alpha/#comment-9452 alpha is another word for alchemy. stay in yr passive indexes, buy a house you can easily afford, keep cash on hand and work hard.

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By: dWj http://blogs.reuters.com/felix-salmon/2009/12/01/illegal-alpha/comment-page-1/#comment-9451 Tue, 01 Dec 2009 20:05:12 +0000 http://blogs.reuters.com/felix-salmon/2009/12/01/illegal-alpha/#comment-9451 Perhaps it makes sense to use alpha as a red flag; indeed, a lot of the hindsight argument that people should have suspected Madoff was up to something is based on his Sharpe ratio.Taking either of these, though, as more than a suggestion as to where to direct some portion of law enforcement attention would be a bit of an overextrapolation, and would in fact be, if I may say it, an overreliance on an at-best imperfect model.

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