Hedge Fund Manager gives it up

[MBAustin]

And moves mostly to index funds

http://www.kiplinger.com/article/investing/T052-C018-S002-why-this-hedge-fund-manager-is-shutting-down.html

An excerpt:
Lessons learned. So what did I learn from my plight? First, that I took a big risk when I created a portfolio that was wildly different from Standard & Poor’s 500-stock index. That was especially problematic in 2014, when hardly anyone beat the index. Magnifying the problem was my decision to put too much money into my favorite ideas. I totally bought into the notion that it was foolish to invest in my 60th-best idea. What I overlooked was how bad things could get if I was wrong about my second-best, third-best and fifth-best ideas at the same time.



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[jazz4cash]

Thanks for posting this. Here's my most significant takeaway:

"when you feel as if everything you’ve done right over an investing lifetime is being warped by the desire to do something heroic in the next 12 minutes to save your fund, then you stop trusting yourself and your investment process altogether. At such moments, I understood why anyone would simply decide to walk away from the game. And I also understood—-really, really understood—-why some people would decide to cheat"

 

[MBAustin]

I agree, jazz - that was a great insight into the industry that he gave.