Difference between revisions of "Leveraged alpha"

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{{a|glossary|}}Snake oil, basically.  
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{{a|glossary|}}{{t|Snake oil}}, basically.  
  
 
[[Leverage|Leveraging]] [[alpha]] is technically possible, but in practice --- yeah.  
 
[[Leverage|Leveraging]] [[alpha]] is technically possible, but in practice --- yeah.  

Latest revision as of 10:07, 9 November 2019

The Jolly Contrarian’s Glossary

The snippy guide to financial services lingo.™
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Snake oil, basically.

Leveraging alpha is technically possible, but in practice --- yeah.

What most hedge fund manager claim to be leveraged alpha is, usually, really plain old vega - that is, just leverage. If your market benchmark is beating the risk-free borrowing rate, you will make money by borrowing. But if it ain’t...

A fellow who pitches a "leveraged alpha" product to you is most likely a charlatan — you would expect that, it being the financial markets and all — and a mediocre fund manager. Especially if you see backtesting to demonstrate historical alpha.


Go hunting for charlatans here.