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Alternative Market Briefing

De Francisci: Key to successful investing is not in steady returns, Part 3

Friday, August 08, 2014

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Giovanni de Francisci
Benedicte Gravrand, Opalesque Geneva:

Giovanni de Francisci runs the Petschek Family Office out of Monaco. He describes his unconventional views on manager selection, the state of the hedge fund industry and investment risks using various colorful similes during a recent Opalesque TV interview with Matthias Knab. Here are some of his views.

Feast when there is plenty De Francisci is looking for "phenomenal returns," not steady returns (see also why in Part 1 here). The free lunch is not in the great returns but in the steady returns, he says. Seeking a steady return is like defying natural law.

Using the metaphor of a young bear (as the investor) hiding in a cave from mountain lions (the Madoffs of this world), and who only goes to places he knows (only invests in things he understands) to feed and survive. But he can still be prey to the mountain lion that waits for him when he ventures out. However, if the bear enters and exits the cave erratically, the lion will not be able to predict his moves. And if the bear ventures to places he’s never been before, he becomes even less predictable for the lion.

"In my opinion, the key to successful investing is not a steady return," de Francisci continues. "It’s to understand that in the cycl......................

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