Institutional Investor (July 15)
“Investors need to understand the limits of what high returns tell them about a fund and probe deeper than the track record. In credit, headline returns can look attractive for years until the weakest loans finally reveal themselves. Only then do investors discover what was really sitting at the bottom of the portfolio.”
Tags: Credit, Fund, Headline returns, High returns, Investors, Limits, Loans, Portfolio, Probe, Reveal, Track record, Understand, Weakest
New York Times (October 3)
“Hurricanes and recessions are alike in many ways,” and we might be able to understand both better by thinking about the other. Both phenomena “cause enormous damage,” “are hard to predict” and “depend on feedback effects,” but “a recession doesn’t leave yachts stacked up on shore like a child’s toys.” Still, the damage from a recession can be just “as severe and is certainly more widely spread than a hurricane’s. Hang on to your hat.”
Tags: Damage, Enormous damage, Feedback effects, Hang on, Hurricanes, Phenomena, Predict, Recessions, Severe, Understand, Yachts
Financial Times (August 15, 2020)
“Forecasters least understand what is going on, and so make their biggest errors, when an economy is hit by a shock that is both novel and large. The coronavirus pandemic is both.”
Tags: Coronavirus, Economy, Errors, Forecasters, Novel, Shock, Understand
