Fri, Mar 6, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: Ways to benefit from macro inefficiencies in equity markets

Friday, May 02, 2014

amb
Dr. Vinay Nair
This article was authored by Dr. Vinay Nair, Founder and CEO of Ada Investments, an equities-based investment platform with offices in New York, Mumbai and Rio de Janeiro. Prior to becoming an investment manager, Dr. Nair was an Assistant Professor of Finance at The Wharton School, where he is now a visiting professor.

I was recently reading Justin Fox’s interview with John Campbell and was reminded of Paul Samuelson’s hypothesis on efficiency.

"Modern markets show considerable micro efficiency (for the reason that the minority who spot aberrations from micro efficiency can make money from those occurrences and, in doing so, they tend to wipe out any persistent inefficiencies). In no contradiction to the previous sentence, I had hypothesized considerable macro inefficiency, in the sense of long waves in the time series of aggregate indexes of security prices below and above various definitions of fundamental values" (Shiller, 2001).

What he is saying here is that relative mispricing between different stocks will be corrected fairly quickly. But the overall level of market prices can be puzzlingly low or high for long periods of time. In other words, micro efficiency can co-exist with macro inefficiency. ......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. SkyBridge opens office in Palm Beach County[more]

    Where better for a southern location than South Florida? SkyBridge Capital, which is headquartered in New York, has opened an office in Palm Beach Gardens. Palm Beach Gardens is a "Signature City" in northern Palm Beach County, with a population of around 49,000.

  2. Outlook - Philippe Jordan predicts 'alternative beta' to displace hedge funds, Stan Druckenmiller says Europe, Japan stocks will outpace U.S.[more]

    Philippe Jordan predicts 'alternative beta' to displace hedge funds From Investordaily.com.au: The disappointing performance of hedge funds in recent years is a result of "too much money chasing too little alpha", argues Capital Fund Management. Speaking to InvestorDaily, CFM partner Phi

  3. Investing - As rig count falls, hedge funds pile into long crude futures, Parus tactically shifts long/short exposure ratios, Mario Draghi outflanking Kuroda as bearish euro bets surge, Prime Capital’s 500.com bet derailed after 41% drop[more]

    As rig count falls, hedge funds pile into long crude futures From 247wallst.com: In the week ended February 27, the total number of rigs drilling for oil in the United States came in at 986, compared with 1,019 in the prior week and 1,430 a year ago. Including 281 other rigs mostly drill

  4. Outlook - 5 reasons why 2015 is looking like a breakout year for alternative investments, Hedge fund manager Dan Loeb predicts disappointment for funds seeking energy distress[more]

    5 reasons why 2015 is looking like a breakout year for alternative investments From Forbes.com: …After a strong 2014, the public markets have been off to a choppy start in 2015. This year, savvy investors may be looking for alpha elsewhere. For many institutions and high-net-worth indivi

  5. Event-driven strategies lead hedge fund gains in February while CTA rally shows signs of fatigue[more]

    Komfie Manalo, Opalesque Asia: Hedge funds ended February on a good note (+0.8%), confirming the positive momentum witnessed since the start of the year, reported Lyxor Asset Management in its Weekly Briefing. As of the end of February, the Lyxor He