Noted economist Marc Faber said Friday stock-picking
strategies could come back into the spotlight as a way to beat the market in
what he sees as the coming era of volatility, MarketWatch reports.
Faber also turned bullish on China stocks, viewing equities
in Shanghai (CN:000001) as oversold, though he cautioned against building
long-term holdings in the market.
The Swiss-born economist told a forum of hedge-fund managers
in Hong Kong his interest was piqued by a recent Financial Times opinion column
entitled: “End to ‘alpha’ spells trouble for fund managers.” It chronicled how
a majority of hedge funds have failed to beat major indexes since 2010. The tendency of securities within markets, as
well as far-flung markets with little relation to each other, to move in sync,
in addition to the influence of policy makers on the overall direction of
markets, partly explained the underperformance of so-called active management
strategies, according to column.
Faber, however, wondered whether this line of thought should
be regarded as a contrarian indicator, effectively marking a trend in which
things are about to swing back in fund managers’ favor….
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