“How do you generate alpha in such a competitive market where everything is priced in?” I was recently asked this question by a new hire at well-known NY shop, and it got my gears turning. “I don’t generate alpha, the management I select does,” I replied. The idea that an investor is the generator of alpha is a misconception that elicits the deadliest of all investment sins: forced action.
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Generating Alpha
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“How do you generate alpha in such a competitive market where everything is priced in?” I was recently asked this question by a new hire at well-known NY shop, and it got my gears turning. “I don’t generate alpha, the management I select does,” I replied. The idea that an investor is the generator of alpha is a misconception that elicits the deadliest of all investment sins: forced action.