Re: short termism
and that’s also a very good point of needing to look under the hood. there’s a famous money manager in Canada who was hailed as the greatest money manager of North America just a few years ago. now mutual funds are supposed to be safe, etc, due to lack of leverage. but if your fund manager is buying microcaps and smallcaps that are leveraged to the hilt in their capital structure, even though the fund might not have borrowed money and leveraged its positions, leverage is built into the portfolio inherently because of the risks the manager is taking in his positions.
this fund manager calls himself a disciple of Templeton’s. and yet the more I study him and his moves, he looks like nothing but a gambler to me. he claims to uncover value, all I see is him trading aggressively in microcaps. he claims to do his own original research. well when does he ever have the time to do any research when he’s busy trading stocks around?
there’s got to be something wrong when investors who’re supposed to understand the merits of a business and invest accordingly become closet leveraged traders. and then, there are the ridiculously high MER. but that’s another one of my beefs that I won’t bother with here. argh… this industry is so messed up.
and in a way, it’s our fault. at the end of the day everything starts with our money - the public that buys ETFs, mutual funds, etc. refuse to pay ridiculously high management fees to glorified gamblers and see how the easy money slowly dries up throughout the money chain for everyone on the sellside and buyside.