Comments on: How volatility hits pension plans http://blogs.reuters.com/felix-salmon/2011/11/11/how-volatility-hits-pension-plans/ 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: belgraviavillas http://blogs.reuters.com/felix-salmon/2011/11/11/how-volatility-hits-pension-plans/comment-page-1/#comment-46665 Tue, 16 Apr 2013 12:18:00 +0000 http://blogs.reuters.com/felix-salmon/?p=11060#comment-46665 Great Post. I have not been visiting the site recently. Took a visit again and there were some great comments on the site. Excellent post. Keep up the good work.
Belgravia Villas

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By: jiggawigga http://blogs.reuters.com/felix-salmon/2011/11/11/how-volatility-hits-pension-plans/comment-page-1/#comment-41920 Fri, 20 Jul 2012 02:26:48 +0000 http://blogs.reuters.com/felix-salmon/?p=11060#comment-41920 Fire these investment managers and hire some new ones from Diamond Supply Snapbacks.

http://www.snapback25.com/index.php/diam ond-supply-co-snapback-hats.html

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By: jiggawigga http://blogs.reuters.com/felix-salmon/2011/11/11/how-volatility-hits-pension-plans/comment-page-1/#comment-41919 Fri, 20 Jul 2012 02:26:26 +0000 http://blogs.reuters.com/felix-salmon/?p=11060#comment-41919 Fire these investment managers and hire some new ones from Diamond Supply Snapbacks.

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By: feitian http://blogs.reuters.com/felix-salmon/2011/11/11/how-volatility-hits-pension-plans/comment-page-1/#comment-36906 Sat, 17 Mar 2012 08:02:56 +0000 http://blogs.reuters.com/felix-salmon/?p=11060#comment-36906 I like tha post. I knew little about this topic before, but now I find that I know a litte. Thank you very much.http://www.discountchristianloubout inred.com

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By: desimal http://blogs.reuters.com/felix-salmon/2011/11/11/how-volatility-hits-pension-plans/comment-page-1/#comment-33166 Wed, 16 Nov 2011 23:35:43 +0000 http://blogs.reuters.com/felix-salmon/?p=11060#comment-33166 fire those investment managers! and make sure you give them a good bonus! WHY HAVENT WE LEARNED A THING YET?!

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By: DrJJJJ http://blogs.reuters.com/felix-salmon/2011/11/11/how-volatility-hits-pension-plans/comment-page-1/#comment-33081 Tue, 15 Nov 2011 01:04:37 +0000 http://blogs.reuters.com/felix-salmon/?p=11060#comment-33081 If you’re gambling for high returns, your group should cover the loss, NOT THE TAX PAYER! NO BRAINER!

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By: DrJJJJ http://blogs.reuters.com/felix-salmon/2011/11/11/how-volatility-hits-pension-plans/comment-page-1/#comment-33079 Tue, 15 Nov 2011 01:01:58 +0000 http://blogs.reuters.com/felix-salmon/?p=11060#comment-33079 Gambling with public pensions is like flirting with dynamite! I’d bet anything California will end up with almost a trillion dollar pension deficit before long-just california! Capitaal preservation is the nak=me of the game now-can you hold on to your principle! double digit ROIs is dreaming/gambling now folks-call it greed!

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By: TFF http://blogs.reuters.com/felix-salmon/2011/11/11/how-volatility-hits-pension-plans/comment-page-1/#comment-33075 Mon, 14 Nov 2011 23:50:51 +0000 http://blogs.reuters.com/felix-salmon/?p=11060#comment-33075 @DAL, from a fundamentals perspective a small rise-and-fall may have no impact at all on the underlying value of the company, yet a larger rise-and-fall can distort operations and truly destroy value.

In a boom-and-bust cycle, there is a tendency to over-expand capacity and (following the bust) end up having to write down plants and inventory. This was deadly for the fiber/telecom industry in 2001.

In a bust-and-boom cycle, there is a strong temptation to pull back on innovation and cut costs, limiting future revenue growth when the rebound comes. (May also run into financing problems.)

Either way, you are likely to end up paying large management bonuses in the “boom” half of the cycle, even if the overall movement is comparatively small.

The price swing can simultaneously reflect value destruction and lead to additional value destruction. The latter is the best argument against market volatility — it reduces the efficiency of the economy.

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By: DAL206 http://blogs.reuters.com/felix-salmon/2011/11/11/how-volatility-hits-pension-plans/comment-page-1/#comment-33071 Mon, 14 Nov 2011 21:14:13 +0000 http://blogs.reuters.com/felix-salmon/?p=11060#comment-33071 The problem with a 20% rise-and-fall as compared to a 5% rise-and-fall has nothing to do with volatility. It has to do with the fact that in the first scenario, there is greater destruction in value. Percentages are a useful tool for our limited brains to comprehend comparative values, but don’t forget that a percent gain or loss represents an absolute increase or decrease in value. In your scenario, “volatility” is just a way of describing what happened–volatility didn’t actually “cause” the decline in value.

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By: Finster http://blogs.reuters.com/felix-salmon/2011/11/11/how-volatility-hits-pension-plans/comment-page-1/#comment-33050 Sun, 13 Nov 2011 16:08:19 +0000 http://blogs.reuters.com/felix-salmon/?p=11060#comment-33050 There are very few people and institutions with true holding power today. Even long term investments are presented in quarterly or monthly reports and benchmarked.

Long term outperformance certainly needs regular short term underperformance. Targetting returns that are unachievable on an adequate risk base is a recipe for disaster though. In the words of Benjamin Graham “turning investors into speculators with a speculator’s result.”

The Hawaii Employees’ Retirement System probably is moving into a bracket here that its investors and overseers cannot shoulder. The worst possible decision of course would be to de-risk following a plunge in risk asset value and realising the losses. Reversing course mid way on the down leg consistently is the worst option of all.

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