LinkFest

Really enjoyed Fox’s book The Myth of the Rational Market, and I’m going to add it to the Reading List.  Although I wish Fox would have mentioned Andrew Lo in the book and his AMH.

—-

My first pass at the FAQ is finally up!  email more questions to mf@cambriainvestments.com with FAQ in the subject line.

—-

My paper just passed 30,000 downloads.  Next stop, Market Efficiency, no irony there…

—-

Does Einhorn have Buffett’s ear?

—-

Costs of higher education Parts 1, 2, and 3.

—-

Interesting news that Covestor is launching their Multi-Manager platform.  I am really surprised this received SEC approval, but congrats Perry and team for getting it done where others could not (namely Vestopia, Cake, and Ka-ching – which I include because it uses “fantasy” portfolios rather than real money).

I have some real concerns about conflicts of interest and their fiduciary role (ie minimum trading volume in a stock is only 10,000 shares traded), but time will tell how that plays out.

I think Covestor will be successful as a company.  I do not, however, think the underlying investors will have the same success.  This has nothing to do with Covestor of course, but everything to do with investor behavior – namely chasing the hot hand.  (ie check out all the DALBAR studies and the recent Bogle ETF studies.)  One could call this a massive exercise in survivor bias (check out the underperforming Marketocracy mutual fund as an example).

This could be a decent option for smallish RIAs and BDs to essentially outsource their back-office, or to completely eliminate client interactions (positive or negative for the advisor, depending).