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Epsilon Theory’s Latest: Wall Street’s Merry Pranks
The following piece is by Rusty Guinn as published over at Ben Hunt’s excellent Epsilon Theory
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Uilenspigel was ultimately hanged for his practical jokes. Thank you for the reminder of a man who made fools out of fools. We need him today.
Preaching to the choir here. Full disclosure I am an RIA, and I cannot tell you how many times I have saved clients way more than my fee from related and unrelated financial decisions to my practice. Besides everything else in the article I factor in a client’s human capital to their risk profile- translation- what they do for a living. So I would not have an investment banker investing in lots of risky assets related to their business and I might have an airline employee buy energy related assets to hedge their professional exposure. Robo- advisors and do it yourself ETF people will often miss factors that a skilled FA will see immediately. Lowest bid, not always the best bid as you know. In addition, one of the reasons passive funds will outperform is fees, so a low/reasonable cost active strategy can also be a winner, and that will often depend on how efficient and transparent a market is. Maybe not large cap US stocks but other markets can lend themselves to active management as long as the costs are reasonable.
Ok I will get off my soapbox. Have a great night all!
Wow thank you for this lengthy and at times personal tutorial — definitely worth a Second Read to unpack all the dense wisdom imparted in this blog.
as noted in the attribution at the top, all Rusty and Ben on this one. check out Epsilon Theory for more of their stuff. http://www.epsilontheory.com/
Pretty long rationalization of “You get what you pay for”.
Rationalizing is our most powerful tool of self-persuasion.
Don’t get me wrong, I wouldn’t perform heart surgery on myself.
Money is far more complicated than that.