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Scott Burns: Hedge Funds: Big on Buns, Short On Beef
His Coffeehouse Portfolio sucked last year relative to S&P, so he has to find a target to feel good about himself. A bit of class bashing to appeal to the masses will surely help. Those dumb rich deserve to lose.
Never mind that these lazy portfolio peddlers used a bad benchmark of beating S&P to promote them even though they added riskier assets than S&P that over performed over S&P to give them bragging rights. That fallacy came home to roost last year.
Never mind that they confused the volatility reduction benefits of diversification to imply higher risk-adjusted performance. This fallacy was shown up last year.
Never mind that the world of hedge funds is a very wide one from capital preservation strategies to absolute returns to focused multi year bets to ... to make an average over all of them meaningless. Why not compare the average returns over ALL mutual funds to average returns over all hedge funds.
Reply to @Ted: Perhaps you should read some of the articles/sites you link to.
You are correct that there is an original coffehouse portfolio of half total bonds, half total stock market. Burns adopted that to propose a number of lazy portfolios under the Couch Potato Portfolio strategy that has been associated with his name. It is the basic premise of his advisory service. He has completely adopted that named strategy as his own in his writings.
Which is why the article you linked had at the beginning:
As I pointed out last week, the basic Couch Potato portfolio had a humbling year for 2013. But it still trounced the Bloomberg Hedge Funds Aggregate Index.
Reply to @cman: I agree with you, but I'll also add whoever came up with the name "Coffeehouse Portfolio" sucks. Hey, I'm going to start an ETF called the Quirky Name Fund. People will say,
"I'm a couch potato who likes investing, but doesn't like thinking. Is this right for me?" "Sure!"
"I go to coffeehouses and I'm not sure how that has anything to do with my investment style, but is this right for me somehow?" "Sure, why not!"
Comments
Never mind that these lazy portfolio peddlers used a bad benchmark of beating S&P to promote them even though they added riskier assets than S&P that over performed over S&P to give them bragging rights. That fallacy came home to roost last year.
Never mind that they confused the volatility reduction benefits of diversification to imply higher risk-adjusted performance. This fallacy was shown up last year.
Never mind that the world of hedge funds is a very wide one from capital preservation strategies to absolute returns to focused multi year bets to ... to make an average over all of them meaningless. Why not compare the average returns over ALL mutual funds to average returns over all hedge funds.
Opium for the masses.
Regards,
Ted
You are correct that there is an original coffehouse portfolio of half total bonds, half total stock market. Burns adopted that to propose a number of lazy portfolios under the Couch Potato Portfolio strategy that has been associated with his name. It is the basic premise of his advisory service. He has completely adopted that named strategy as his own in his writings.
assetbuilder.com/company/the_evolution_of_the_couch_potato
Which is why the article you linked had at the beginning: My comment is in that context.
Regards,
Ted
Coffeehouse Portfolio: (Seven Funds)
http://www.marketwatch.com/lazyportfolio/portfolio/coffeehouse
Couch Potato Portfolio: ( Two Funds)
http://assetbuilder.com/lazy_portfolios/Returns/couch_potato_portfolios/couch_potato
"I'm a couch potato who likes investing, but doesn't like thinking. Is this right for me?" "Sure!"
"I go to coffeehouses and I'm not sure how that has anything to do with my investment style, but is this right for me somehow?" "Sure, why not!"
My comments are all about Scott Burns and his Couch Potato portfolio strategy to be clear.
Regards,
Ted
Wood Shed;