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Skating Where the Puck Was: The Correlation Game in a Flat World (Investing for Adults Book 2) Kindle Edition
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Top Customer Reviews
Bernstein uses the hedge fund industry to illustrate the herd skating to where the puck was. Bernstein observes that the early hedge-fund adapters, such as Yale University's endowment, could exploit alpha and earn excess returns. Yet once the strategy became popular and a couple of trillion dollars was chasing it, the puck "moved." The institutional money that chased hedge funds ended up with costs much higher than the little bit of alpha that remained. To make matters worse, correlations increased, and most hedge funds zigged at the same time stocks did the same.
This is the second installment in Bernstein's brilliant series in investing for adults. It's not for novices or those that want to believe there is some magic way to earn high returns without risk. To be a successful adult investor, Bernstein makes a compelling case to be early, be far-sighted, and be patient.
I can't get enough of William Bernstein's insights!
Granted it was my own fault for not fully investigating this "essay" before purchasing it. But come on man, this is WAY overpriced for what it is.
This one talks about the tendency and danger of buying into an investment as it peaks. The analogy to hockey is that if the athelete skates towards where the puck, when he gets there it will certainly be gone. Bernsteins advice on avoiding this is not so much to anticipate where the puck (market) will be when you get there, it's to adopt a strategy that takes a much longer view. I'm an Asset Allocation for the long haul investor, so this was pretty familiar material to me. That's probably why I rate it below his other books. But if you're still skating where the puck was, this is a must read!
I have a website, and a small section of it on Personal Finance. I recommend Bernstein's writing to my visitors, including this book and its two siblings. I consider the series a must-read for even the moderately serious investor.
My general issue with this book was that it basically said, in short, that all of the investment strategies, including the previously less-well-known "alternatives" have been exploited to the point that there is really no way to have a competitive advantage in portfolio construction. It was no negative, in fact, that the book cast doubt as to whether even typical portfolio construction, such as those often touted by the boglehead community, would be successful. If I'm remembering correctly, he practically went so far as to say, perhaps consider tossing in the towel on all of that, and start a private business, or something similar, meaning that success in "passive investing" only may indeed be a thing of the past.
If you ask me, I think that is way too pessimistic, especially if one were to study global stock valuations in relation to historical figures. In real application, I know I have personally averaged well over 12-13% the past 5-6 years or so in my globally diversified portfolio. Though I fully willing to take him at his word that "yale" models have done poorly recent years, I'm relatively sure mine is someone similar to those models and I have been double digits return every since 07'. So I'm at a loss as to where the inconsistencies lie between his figures on "Yale" model and my personal success with my portfolio.Read more ›
Most Recent Customer Reviews
Shows how any investment scheme which generates above market results will be gone by the time it becomes common knowledge. Read morePublished 8 months ago by Joe Myers
A useful look at the changing nature of the security markets. By a real expert who puts the reader's welfare first.Published 8 months ago by Chemist (NW, retired)
This new series along with the intelligent asset allocator are great. The new series is much more realistic. Good job.Published 13 months ago by P. Talbert
I relate to all of Dr Bernstein's writings. They are excellant.Published 17 months ago by rex witherspoon
Superb book, eye opening. Bill Bernstein provides excellent insight, as usual.Published 20 months ago by Bill
Dr. Bernstein writes a clear explanation of the reasons to spread your investment portfolio amongst numerous asset classes. Read morePublished 21 months ago by Stephen Baig