The Quest for Alpha by Larry E Swedroe

The Quest for Alpha by Larry E Swedroe

The final word on active vs. passive investing!

King Arthur and his court pursued the Holy Grail, the mythical cup or dish used by Jesus at the Last Supper. The financial equivalent of the pursuit of the Holy Grail is the quest for the money managers who will deliver alpha--returns above the appropriate risk-adjusted benchmark. The quest for alpha is based on the theory that the markets are inefficient, and smart people working diligently can discover pricing errors the market makes. But there is a competing theory based on about sixty years of academic research. Its premise is that markets are highly efficient--the market price of a security is the best estimate of the right price. If markets are highly efficient, efforts to outperform are unlikely to prove productive after the expenses of the efforts. So which theory is correct?

In The Quest for Alpha, Larry Swedroe presents research, data, and advice from some legendary market gurus to show that it is extremely difficult to outperform the market. Examining the evidence from academic studies on mutual funds, pension plans, hedge funds, private equity/venture capital, individual investors, and behavioral finance, he demonstrates that the markets are indeed highly efficient. Swedroe then explains why investors should instead focus on asset allocation, fund construction, costs, tax efficiency, and the building of a globally diversified portfolio that minimizes, if not eliminates, the taking of idiosyncratic, uncompensated risks.

And to those who ask, But how do you explain Warren Buffett? Swedroe's answer is simple. I tell them if they see Warren Buffett when they look in the mirror, go ahead and seek the holy grail of alpha, he says. If they don't, give up the quest and play the winner's game.

LARRY E. SWEDROE is Principal and Director of Research for The Buckingham Family of Financial Services, which includes Buckingham Asset Management and BAM Advisor Services. Buckingham Asset Management manages more than $2 billion in assets for individuals, businesses, trusts, not-for-profits, and retirement plans. BAM Advisor Services provides turnkey asset management services for more than 120 registered investment advisor firms and manages or administers more than $9 billion in assets. Swedroe has held executive level positions at Prudential Home Mortgage, Citicorp, and CBS. He frequently speaks at financial conferences throughout the year and writes the blog Wise Investing for CBS MoneyWatch.com.

KEVIN GROGAN is an Investment Advisor Associate for The Buckingham Family of Financial Services.

TIYA LIM is an Investment Strategy Manager for The Buckingham Family of Financial Services.

SKU	Unavailable
ISBN 13	9780470926543
ISBN 10	0470926546
Title	The Quest for Alpha
Author	Larry E Swedroe
Series	Bloomberg
Condition	Unavailable
Binding Type	Hardback
Publisher	Bloomberg Press
Year published	2011-02-04
Number of pages	208
Cover note	Book picture is for illustrative purposes only, actual binding, cover or edition may vary.
Note	Unavailable