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Money managers under the microscope

Go for those nickels!


The hard lessons learnt from the credit crisis might suggest investors shouldn’t be trying to pick up the proverbial nickelsĀ on a railway track. REUTERS/Luke MacGregor

REUTERS/Luke MacGregor

In a blog post in May I pointed to research by Yale academic Hongjun Yan that hedge fund managers are far more likely to choice so-called nickel strategies than so-called black-swan strategies.

(To recap, nickel strategies yield small returns most of the time with the occasional disaster, black swan strategies take years of small losses but hit the jackpot when rare events such as the credit crisis occur).

However, according to fund of hedge funds firms Culross Global Management, now is exactly the right time to leap onto the railway track and pick up all those nickels.