Meredith Whitney says she’s done managing other people’s money. I wonder if she settled on that bold decision after everyone took their money out of her fund?
We see articles like this funnel through the newswire every few months or so. The story follows that a famous investment analyst or pundit decides that they are going to put their investment talents to better and more profitable use. What better way to do this than invest other people’s money?! Yesterday it was Ron Insana, today it is Meredith Whitney, and the wheel keeps on turning. I’m just hoping for the Mother of Dragons to come along and break the wheel.
There are many angles to stories like these. Here are a few:
1) Meredith Whitney may very well be an analytical whiz. Unfortunately, that has very little to do with being a successful investor. As an analyst, if a market call doesn’t work, you make another call with little to no consequence because people tend to forget talking heads rather quickly. When you are putting actual investment capital behind those calls, people’s memories improve and you may eventually run out of capital.
2) Having a great thesis and putting it into practical application are two very distinct things. As the great Mike Tyson said: “Everybody has a plan until they get punched in the face.”
3) We will eventually forget her John Lennon type of “lost weekend” and in a few years she will convince others to invest their own capital in her ideas all the while profiting her underlying company regardless of the idea’s outcome.
4) Successful investing has nothing to do with being right but with being in the market and capturing long term rates of return. It is not exciting but it is very effective.Read More
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