A Study Found How The Best Hedge Funds Make Tons Of Money
Dec 20, 2013, 23:07 IST
The best hedge funds get in and get out, says a study to be presented by a University of Kentucky professor.
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Bloomberg reports that finance professor Russel Jame's study has found that the tpo 30% of hedge funds outperform by making short term, contrarian bets.
It also finds that 25% of a fund's annual performance occurs a month after a big winning trade.
In other words - when they score. They score big.
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The winning funds are net buyers of so-called growth stocks, which are those of companies whose earnings are forecast to grow faster than the market average. They also don't trade more frequently or more profitably prior to corporate earnings' announcements, undermining any idea that insider trading explains how they make profits.
Remember this one, y'all.