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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (54688)	4/5/1999 3:39:00 PM
From: BSGrinder	Read Replies (1) \| Respond to of 132070

More Cramer ravings: "Random musings: Reading Gregg Wirth's excellent article about Net coverage, I was thinking that if I were running research at one of these firms I would call in all of the steel and paper and chemical analysts and say, "OK, ladies and gentlemen, as of today you are Net analysts. Nobody cares about the steels or the coppers any more. Go learn new stocks. You do e-commerce. You do .com infrastructure. You do e-content. Go make some clients some money for a change." OK, just dreaming, but it is what I would do." If it were April 1, I would think it was a joke. But I guess we're finally getting there...where we can dispense with real goods and production entirely...and all make money trading inuts. Go e-everything! I keep wondering how much nuttier things can get. /Kit

To: Knighty Tin who wrote (54688)	4/5/1999 7:37:00 PM
From: BGR	Read Replies (2) \| Respond to of 132070

Michael, Performance measures always has to be against a benchmark. Otherwise, anyone can do 5 pushups and claim to be the best athlete in the world. Hence, comparison against the market, which is something an investor can very easily invest in, is important. As for which market, that of course depends on access. If an investor is restricted (in any way other than by conscious choice) to certain market segments, only those market segments averages should be considered as a comparative portfolio. Since you say that you have taken much less risk than the market, at the risk of upsetting you, may I enquire what your yardstick is for measuring risk? Beta definitely has it's limitations. As you have pointed out, it is backward looking. There has been talks of getting more forward looking and directly calculable measures, for example, using the implied volatility instead. I look forward to seeing what your index of risk is. BTW, MPT never claims that superior investors - whose returns adjusted for risk regularly beat the market - do not exist. It's just that they are vanishingly rare. There are several other investors who take on a lot of risk and outperform (like the Internet day traders, for example). -BGR.