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Invest in assets or strategies? The world’s smartest ever hedge fund manager Munehisa Homma, invented quantitative investing, event-driven arbitrage and algorithmic trading. Many good hedge funds increased exposure to Japan after the earthquake but weak ones reduced and sold the low. Other managers lost because their “quants” and “risk managers” hadn’t stress tested for an event that was certain to occur. Inevitable happenings aren’t black swans.

Homma-sensei would be buying Nikkei 9,000 call options right now. Taking the other side of panic usually works. In 1755 the developer of systematic pattern recognition and candlestick analysis wrote “Buy when the crowd is selling”. The current commodities “boom” is ideal for his contrarian relative value strategies. Some commodities traders even attempt to find alpha without mastery of his methods. No wonder most of them lose over time. Beta bull markets disguise vast manager incompetence.

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Invest in assets or strategies? The world’s first hedge fund manager Munehisa Homma, invented quantitative investing, event-driven arbitrage and algorithmic trading. Many good hedge funds increased exposure to Japan after the earthquake but bad ones reduced and sold the low. Other managers lost money because their “quants” and “risk managers” hadn’t stress tested for an event that was certain to occur. Inevitable happenings aren’t black swans.

Homma-sensei would be buying Nikkei 9,000 call options right now. Taking the other side of panic usually works. In 1755 the developer of systematic pattern recognition and candlestick analysis wrote “Buy when the crowd is selling”. The current commodities “boom” is ideal for his contrarian relative value strategies. Some commodities traders even attempt to find alpha in such markets without mastery of his methods. No wonder most of them lose over time.

Read the rest of this entry »

Jun 21, 2011: We wish you a wonderful summer ahead. Officially summer begins today and ends on September 22nd. Summer has sweet memories for most of us. As school children, summer was a time we looked forward to. We all know the best part, “no school!” Summer vacations involved travel to distant new places. We loved to travel though it was hot. It was a fantastic way to see new things and be

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Invest in assets or strategies? The world’s first hedge fund manager Munehisa Homma, invented quantitative investing, event-driven arbitrage and systematic trading. Many good hedge funds increased exposure to Japan after the earthquake whereas bad ones reduced and sold the low. Other managers lost because “quants” and “risk managers” hadn’t stress tested for an event that was certain to occur. Inevitable happenings aren’t black swans.Most likely Homma-sensei would be buying Nikkei 9,000 call options right now, like me. Taking the other side of panic usually works. In 1755 the developer of pattern recognition and candlestick analysis wrote “Buy when the crowd is selling”. The current commodities “boom” is ideal for his contrarian relative value strategies. Amazingly some commodities traders even attempt to find alpha in such markets without mastery of his methods. No wonder most of them lose over time.Apart from cash, the best way to help a region get back to business is to go there. In the north it’s a rescue situation now but the worst hit areas will be looking to reconstruct. Northern Japan having been the home of the world’s greatest ever money manager also has superb hot springs, traditional ryokan, ski resorts and mountain hiking. The local economy will need customers. And investors.I’m arranging an investor trip to the affected areas in Japan. The values and opportunities are compelling. Anyone or any group interested is welcome to get themselves to Tokyo in September prepared for a one week journey. I can sort out the logistics within Japan. It’s a great time to visit Tohoku. The best ryokan and got springs are available then. The region will need assistance long after the media goes home. There really is a triple bottom line for win/win/win investing. A rough one week itinerary: 1) Head to Homma’s home town to visit his historic house, trading room, garden, art gallery and the family office/corporation he founded that exists today2) As far as is practicable and respectful, visit the worst hit parts of the north east coast. And hopefully directly help some devastated local families and villages3) Visit some alpha places in Tohoku I don’t want the beta crowd to know about4) Stay in traditional hotels amid beautiful scenery5) Drop by some north Japan institutions and HNWIs that invest in great hedge fundsA week of your time that won’t be wasted. All participants will receive the only English language translation of Honma’s great work on investing - “The Fountain of Gold”. That’s after viewing the actual fountain of gold. The Sage of Sakata paved the way for modern day alpha capture superstars like the Oracle of Omaha and the Brain of Budapest.Since the earthquake, tsunami and radiation scare, I haven’t been able to contact several people I know that were in the worst affected area and their chances look remote. But the survivors will need plenty of help. Also having rescued and adopted many animals over the years, I’m concerned about the fate of displaced Japanese pets and work animals. Whether it’s guarding an injured friend, a forlorn horse, baby dolphins, deer on sacred Kinkasan or the famous Cat Island.If you can donate it would be great. Soon the north Japan situation will drop off the headlines but problems and desperation will remain. Bigger cities like Sendai, Kesennuma and Kamaishi have lost thousands in population. I’ve been to those sadly now well-known places like Minamisanriku, Minamisoma and Rikuzentakata. Charity now but socially responsible infrastructure investing soon.Please let me know. If you can’t make it, please consider donating anyway. You can email HedgeFundBlog@gmail.com if you have interest in the trip.

by Veryan Allen. Copyright

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Invest in assets or strategies? The world’s first hedge fund manager Munehisa Homma, invented quantitative investing, event-driven arbitrage and systematic trading. Many good hedge funds increased exposure to Japan after the earthquake whereas bad ones reduced and sold the low. Others lost because some “quants” and “risk managers” hadn’t stress tested for an event that was certain to occur. Inevitable happenings aren’t black swans.

Most likely Homma-sensei would be buying Nikkei 9,000 call options right now, like me. Taking the other side of panic usually works. In 1755 the developer of pattern recognition and candlestick analysis wrote “Buy when the crowd is selling”. The current commodities “boom” is ideal for his contrarian relative value strategies. Amazingly some commodities traders even attempt to find alpha in such markets without mastery of his methods. No wonder most of them lose over time.

Read the rest of this entry »

Invest in assets or strategies? The top hedge fund manager Munehisa Homma, invented quantitative investing, event-driven arbitrage and systematic trading. Good hedge funds increased exposure to Japan after the earthquake; bad ones reduced and sold the low. Others lost because their “quants” and “risk managers” hadn’t stress tested for an event that was certain to occur. Inevitable happenings aren’t black swans.

I’m sure Homma-sensei would be buying Nikkei 9,000 call options right now. Taking the other side of panic usually works. In 1755 the developer of pattern recognition and candlestick analysis wrote “Buy when the crowd is selling”. The current commodities “boom” is ideal for his contrarian relative value strategies. Amazingly some commodities traders even attempt to find alpha in such markets without complete mastery of his methods.

Read the rest of this entry »

Invest in assets or strategies? The first hedge fund manager Munehisa Homma, invented quantitative investing, event-driven arbitrage and systematic trading. Good hedge funds increased exposure to Japan after the earthquake; bad ones reduced and sold the low. Others lost because their “quants” and “risk managers” hadn’t stress tested for an event that was certain to occur. Inevitable happenings aren’t black swans.

I’m sure Homma-sensei would be buying Nikkei 9,000 call options right now. Taking the other side of panic usually works. In 1755 the developer of pattern recognition and candlestick analysis wrote “Buy when the crowd is selling”. The current commodities “boom” is ideal for his contrarian relative value strategies. Amazingly some commodities traders even attempt to find alpha in such markets without complete mastery of his methods.

Read the rest of this entry »

Invest in assets or strategies? The first hedge fund manager Munehisa Homma, invented quantitative investing, event-driven arbitrage and systematic trading. Good hedge funds increased exposure to Japan after the earthquake; bad ones reduced and sold the low. Others lost because so-called “quants” and “risk managers” hadn’t even stress tested for an event that was certain to occur. Inevitable happenings aren’t black swans.

I suspect Homma-sensei would be buying Nikkei 9,000 call options right now. Taking the other side of panic usually works. In 1755 the developer of pattern recognition and candlestick analysis wrote “Buy when the crowd is selling”. The current commodities “boom” is also ideal for his contrarian long/short relative value strategies. Amazingly some investment “professionals” still attempt to trade such markets without complete mastery of his methods.

Read the rest of this entry »

Invest in assets or strategies? The first hedge fund manager Munehisa Homma, invented quantitative investing, event-driven arbitrage and systematic futures trading. Good hedge funds increased exposure to Japan after the earthquake; bad ones reduced and sold the low. Others lost because so-called “quants” and “risk managers” didn’t even model for an event that was certain to occur.

I have no doubt Homma-sensei would be buying Nikkei 9,000 call options right now. Taking the other side of panic usually works. In 1755 the developer of pattern recognition and candlestick analysis wrote “Buy when the crowd is selling”. The current commodities “boom” is also ideal for his contrarian long/short relative value strategies. Amazingly some financial “professionals” attempt to trade such markets without complete mastery of his methods.

Read the rest of this entry »

Invest in assets or strategies? The world’s first hedge fund manager Munehisa Homma, invented quantitative investing, event-driven arbitrage and systematic managed futures trading. Good hedge funds increased exposure to Japan after the earthquake; bad ones reduced and sold the low. Others lost because their so-called “quants” and “risk managers” didn’t model for an event that was certain to occur.

I have no doubt Homma-sensei would be long Nikkei 9,000 call options right now. Taking the other side of panic usually works. In 1755 the developer of pattern recognition and candlestick analysis wrote “Buy when the crowd is selling”. The current commodities “boom” is also ideal for his contrarian long/short relative value strategies. Amazingly some financial “professionals” still attempt to trade such markets without complete mastery of his methods. They will lose.

Read the rest of this entry »