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Leon Levy, the late eminence grise of the hedge fund industry, famously quipped that Long Term Capital Management may have been able to survive having one Nobel laureate on its staff, but that once it hired its second it was doomed.
This highlights a central paradox of the money management industry: Success often hinges on the tension between having both the strength of one's convictions and the intellectual flexibility necessary to admit, relatively quickly, when one is wrong.
The challenge, as my dad put it, is to ride "the airy light of aspiration while feeling the solid weight of earth."
It has been easier, of course, to be humble in the aftermath of the financial crisis when an entire generation of financiers, economists and other "experts" came close to torching the entire financial system.
As late as the summer of 2008, it was still common for us to see an ever-younger group of hedge-fund analysts trying to outdo each other in their levels of intellectual pretension and obnoxiousness at our regular idea luncheons at The '21 Club in New York.
Unshaven young men in flip flops and loose-fitting striped shirts would waltz into these affairs hopelessly late and on the phone, while the older, well-established portfolio managers would watch the spectacle with bemused expressions that gave every indication that this was a comedic farce they had seen one too many times — the go-go managers of the '60s, the raiders-cum-activists of the '80s, the dot-commers, and on and on.
They had seen enough of life to realize that, although the names and sartorial styles will always change, human nature will remain persistently and often dismally immutable.
These memories of this pre-crisis world came flooding back to me in recent weeks after reading a series of articles in a variety of financial publications about a new breed of financial wizards who were all too willing to share with the audience their SAT scores, their world chess rankings, their elevated opinions of themselves and their certainty about the future.
The funds they represented often bore highfalutin' monikers that were just short of Genius Capital Management or Better-Than-You LLC, the managers often boasting of their investments in arcane companies with take-my-word-for-it valuations.
For those who haven't had the chance, I would respectfully suggest that you read the lead interview in the Feb. 21 issue of Barron's. The piece yields no shortage of intriguing investment insights from someone who is clearly talented. But what makes it a must-read is the confidence, or dare one say it, arrogance, of its protagonist.
Mary Schapiro, current chairman of the Securities and Exchange Commission,did not create all the problems at the SEC. Like many commissioners before her, she inherited most of them. From a technologically backward process for reviewing corporate filings and an inability to detect fraud to an ...
The Democratic Senate is itching to pass a bill that will mean death for innovation, which is the backbone of American economic growth. Sen. Patrick Leahy's bill, S. 23, is called patent reform, but it's not reform — it will kill innovation by litigation. Now that the globalists have ...
After two months of the new 112th Congress, they and the president have managed to keep the government going for another two weeks. Wow! There are only 6 1/2 more months to go in this fiscal year. They are really on the ball! The workers who landed one of those 192,000 jobs created last month to ...
According to news reports, Team Obama and House Republicans are at least $50 billion apart in the budget negotiations for fiscal 2011. I'm willing to bet that Team Obama and Senate Democrats won't agree to even $20 billion in spending cuts. And that's a far cry from the GOP's annualized $100 ...
Bismarck's second best-known maxim on the region is that the Balkans start in the slums of Vienna. The Habsburg imperial capital was a protean "multicultural society" wherein festered the ancient grievances of many diverse peoples. Today, the Muslim world starts in the suburbs of Frankfurt. Those ...
Posted By: bobbygordon(4860) on 3/12/2011 | 12:01 AM ET
Just exactly what is your ***in' problem with the word "hubris"?
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The safest place to be during a market downtrend is in cash.
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