Bestselling author Jack Schwager sits down with Opalesque.TV to discuss the findings from his latest book, Market Sense and Nonsense. Despite having authored the bestselling Market Wizards series, Jack says his latest book is: “the most important work that I’ve done. It is a compilation or a distillation of everything I’ve learned about what’s right and wrong with investment, trading and performance evaluation…Lots of precepts and beliefs and actions in the investing world, from academics to professional investors, to hedge fund investing, to ordinary investors – all through that chain people are accepting things or acting on beliefs that are just not correct.”
“Past performance is not indicative of future returns”
Jack describes some of his major findings, including what he calls the “Tyranny of Past Returns”, where Investors usually look at and pick the best performing strategies, often to their detriment. Picking the best performing strategies and sectors from the past is exactly the wrong thing to do, according to Jack, as their returns are consistently below the average strategy, and even more shocking, the worst performing strategies from the past often do better than the best performing.
In addition, learn about some of Jack’s insights from his latest work:- Return alone is a meaningless measure when picking managers – any manager can double their exposure
- Allocators have a stubborn checkbox mentality when it comes to leverage
- But all leverage is not the same – Using leverage to hedge can reduce risk and exposure
- How risk is hidden in track record where episodic risk is not present
- Beware the lack of insufficient and irrelevant data
- Past data can even be an inverse indicator
- Historical models of mortgage defaults
- Look at the current +30 year boom bond market
- Why normal price distribution is convenient, but market history proves implausible
Jack D. Schwager is a recognized industry expert on futures and hedge funds, and the author of a number of widely acclaimed financial books. He is currently the co–portfolio manager for the ADM Investor Services Diversified Strategies Fund, a portfolio of futures and FX managed accounts. He is also an advisor to MarkeTopper Securities, an India-based quantitative trading firm. Previously, Mr. Schwager was a partner in the Fortune Group, a London-based hedge fund advisory firm that specialized in creating customized hedge fund portfolios for institutional clients. His prior experience also includes over twenty years as a director of futures research for some of Wall Street's leading firms.
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Bestselling author Jack Schwager sits down with Opalesque.TV to discuss the findings from his latest book, Market Sense and Nonsense. Despite having authored the bestselling Market Wizards series, Jack says his latest book is: “the most important work that I’ve done. It is a compilation or a distillation of everything I’ve learned about what’s right and wrong with investment, trading and performance evaluation…Lots of precepts and beliefs and actions in the investing world, from academics to professional investors, to hedge fund investing, to or
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