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Advisor Perspectives
Insights into the world of high- and ultra-high net worth investing

June 10, 2008- Vol 2, Issue 24

 

 

 

 

 

 

 

 

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Evaluating active managers is one of the most challenging tasks faced by financial advisors.  Guest contributor John Minahan accomplishes this by evaluating the belief systems of managers - understanding how biases and operational cultures affect investment decisions.

With wild swings in the price of oil a daily occurrence, Ron Brounes looks at the underlying causes, and frames the discussion as a debate between those who believe supply/demand factors are forcing prices up, and those who believe the source of he volatility lies with speculators.

Reverse mortgages are gaining popularity as a planning tool and a source of liquidity for retiring seniors.  They are also the subject of controversy, and guest contributor Diogo Teixeira looks closely at one question - whether reverse mortgages are too expensive relative to other alternatives.

Our interview with Ken French last week drew a number of responses, and we publish two Letters to the Editor, which question French's advocacy of passive over active management. 

Lastly, Ken Kam provides the latest chapter in the ongoing debate over whether his Marketocracy fund demonstrates the ability to identify skillful active managers.

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Evaluating Active Managers: The Role of Belief Systems


John Minahan is an institutional consultant specializing in evaluating active managers.  He shares his experience and the questions he asks to uncover biases and predispositions managers may have, and explains how these can adversely affect performance.

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The Great Oil Price Debate


Are oil price increases driven by speculation, or are the basic forces of supply and demand at play?  Ron Brounes frames the debate, and speaks with a Houston-based manager with a rational explanation for the recent volatility.

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Are Reverse Mortgages Really Expensive?


A common criticism of reverse mortgages is that they are expensive, resulting in the view that they should only be used as a last resort, when a senior has nothing left but their home equity. But, most people don't understand the structure of these costs, which are reasonable compared to the alternatives.

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Letters to the Editor:  Reactions to our Interview with Ken French


Ken French is clearly on the passive side of the active-passive debate, and two readers challenge his views.

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Letter to the Editor: Identifying Skillful Active Managers


Ken Kam responds to last week's letter about the appropriate benchmark for his Marketocracy fund, and in so doing explores the broader question of the correct benchmark for an all-cap actively managed fund. 

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