Comments on: Joe Weisenthal is right about the Ira Sohn conference A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: DanHess Thu, 26 May 2011 18:03:24 +0000 “Most successful fund managers in reality use techniques which they would hesitate to admit to in public.”

Felix, oh, c’mon.

Just because most people aren’t winning in the market doesn’t mean nobody is. These winners aren’t fairies and leprachauns — there are a number of them and we know many of their names.

Just because someone is making money, they must be a crook?

You can read many many years of Warren Buffett’s letters if you want. There are dozens or hundreds of ways of analyzing whether a company will do well over the long haul found in his letters and speeches alone. All legit and this just from one man! If you work really hard and keep just his openly shared strategies in your head all at once, you will do very well.

Warren Buffett has been outstanding but he is not alone; a significant number of other managers are smart enough, creative enough and hard working enough to outperform over the long haul.

Hedge fund managers, with the possible exception of Rennaissance Technologies, aren’t day traders anyway. Day trading doesn’t work well when you are so big that you move the market.

Well, these men certainly don’t need your approval to be winners. Most people are humble enough to feel very grateful when smart people share their ideas. Buffett’s annual meeting is full of such people (many very good investors already) who aren’t too proud to admit that they have much more to learn.

So what motivates these people?
(1) Ego. If you are one of the smartest, most talented people around and few people know it, that is not much fun.
(2) Attract more investors, I agree.
(3) Light a fire under your good ideas. If you have a great idea, buy some shares, and don’t tell anybody, it may take a long time for the market to discover these insights. If you help investors see what you saw, that could be a trigger to help move the stock.
(4) Take criticism. If your grand thesis has holes you didn’t see, its better to have smart people tell you then to suffer losses in the market later.

By: TinyTim1 Thu, 26 May 2011 10:43:05 +0000 I tried to comment with this exact point yesterday (but your Reuters-powered comment bot destroyed it…).

If just a few individual investors attempted to do as much research into ANY of their investments as these guys do, we would have a lot less money lost on poor trading by the little guy.

The methodology and thought process is highly valuable.

However, I STILL have a beef with you Felix.
“Most successful fund managers in reality use techniques which they would hesitate to admit to in public.”

Please, PLEASE tell me where you have garnered this important non-public info on hedge fund managers.

Do you think they LIE to their investors? If so, that is pretty damning and you should probably help out your FoF friends by letting them know who is lying to them.

Do you think the investors KNOW about these non-public techniques but are happy to go with them?
In which case, why keep them non-public?

In my experience of working for three very different funds and in interacting extensively with my peers/competitors I am pretty sure that anyone claiming to do any bottom-up fundamental value based investing use EXACTLY these techniques.

In short – citation needed.