SA has underperformed the Index this year. Also since inception of his fund in July'05, he has posted 10.5% CAGR which I think is not so great.
Edited by basant - 27/Aug/2009 at 2:25pm
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Posted: 27/Aug/2009 at 9:34pm
my $0.02 on Buy and Hold Strategy
Buy and Hold strategy doesn't mean that we should hold on to overheated stock where next few years of growth is already priced in. The basic investment policy is to buy from pessimists and sell to optimists wheever they overshoot the limits. Samir Arora is no exception to this.
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Posted: 27/Aug/2009 at 10:11pm
I think we should read back the mandate of the fund a long short hedge fund cannot function under a blanket buy and hold mandate. Also he has been bullish on certain companies for the last few years on the trot. I am pretty much aware of that so assuming that Samir is no more a buy and hold investor isn't correct but surely when there are redemptions in a fund and the markets fall the mandate of the fund and the demands of investors take over.
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Posted: 29/Aug/2009 at 8:38pm
That's the mandate of his fund.
He is restricted by the mandate.
A long/short hedge fund would generally outperform in bear markets and underperform in bull markets.
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Posted: 29/Aug/2009 at 11:12pm
Instead of being unnecessarily judgemental we should be thankful to Samir Arora for having taken time out and answered all our questions one to one. The debate should be specific to his investing strategy vis-a-vis sectors, concentration, analytical tools, his experience on long term portfolio building strategies etc rather then on his becoming cautious when he has clearly mentioned the expectations from a hedge fund manager as an opening remark to his article.
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Posted: 29/Aug/2009 at 11:46pm
One thing I'm confused about now is the definitiion of a hedge fund. Aren't hedge funds supposed to be super-aggressive, jumping into a market with a billion dollars and moving out with 2 billion after 1 year? Isn't that the reason why some countries frown upon hedge funds?
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