Easy there Poindexter. New analysis suggests that traders who rely on technical analysis should put away their pricing charts and trend maps and just stick to the fundamentals.
The study, conducted by Maastricht University and Santa Clara University, found that technical analysis leads to “dramatically” lower returns than fundamental analysis, according to Bloomberg. The reasoning is rather simple. Technical analysis leads to more trades, more concentrated portfolios and often greets investors with more non-systematic risks.
How much is it costing traders? Enough to make a sizable difference at year-end. The authors of the study say that trend spotting can cost a trader, on average, one-half of a percentage point per month. The costs associated with the trading veracity linked to technical analysis add on another 20 basis points.
No Pay Day for CFA (eFinancialCareers)
If you think earning a Chartered Financial Analyst (CFA) certification is the key to riches, think again. While a CFA credential can certainly brighten up a resume, it shouldn’t embolden you to charge in to your manager’s office and demand a pay increase.
Topical Interview Questions (eFinancialCareers)
If you’re interviewing with Credit Suisse, Morgan Stanley, BNP Paribas, SocGen or Barclays in the next few months, it may be worth probing these areas.
Signs Missed (WSJ)
There were clear telltale signs of fraud that should have been recognized by Citigroup employees at the bank’s Mexican unit, Chief Executive Officer Michael Corbat said on Thursday. The 11 employees who were fired earlier this month were let go because of their inaction.
Cheaper Locales (Insurance Journal)
AIG is set to move several thousand jobs from New York to lower cost areas like Texas and the Philippines. The writing was on the wall last year when the insurance giant’s CEO told workers not to buy a new home in New York. A fairly ominous statement.
Ziff Brothers Out of the Hedge Fund Game (WSJ)
The Ziff brothers are shutting down their second family office hedge fund after top portfolio manager David Fear decided to leave the firm. Between the two closures, a few hundred people are out of work, though many are joining Fear at his new fund.
Ackman Going Public? (Dealbook)
Bill Ackman is considering launching a hedge fund that will be listed on a public exchange. The idea would be to get rid of all those pesky fund redemptions. It’s an interesting idea.
Fighting the Good Fight? (NY Times)
Hedge fund manager Nelson Obus was subpoenaed by the SEC back in 2002 for allegedly trading on inside information. His trial began just this week. He’s spent more than $9 million on legal fees in a civil case that would see him pay a fraction of that if he loses.
Buzz Around the Office
The Blackout Express (Fox News)
The CEO and co-founder of Snapchat is not having a good week. Emails that he sent during his fraternity days were leaked, and they are basically unprintable.
Quote of the Day: “It’s difficult not to conclude from the change in the market structure that the rates business will never be as profitable for banks in the future as it has been in the past.” – Credit Suisse Chief Financial Officer David Mathers