Letters to the Editor

Letters to the Editor

September 8, 2009 by Various

The following is in response to our article originally titled, Republicans Make Better Fund Managers, which appeared last week.

Bob,

I can't imagine what motive there would be to publish a story titled "Republicans Make Better Fund Managers" other than making a cheap political statement, especially when the underlying guts of the story do not support that statement. If that's not a political statement, I don't know what is.

This worthless story (and study) did not legitimately contribute to any sound discussion about investment strategy, portfolio management or financial planning. It is just the kind of slipshod sensationalist journalism I would expect of Fox News or DailyKos. The only reason to title the story is to guarantee you'll be quoted in the "echo chamber."

I come to your website because there are some really interesting articles, many of which have caused deep reflection and thought, and have challenged core (and non-core) beliefs. I had come to look forward to the weekly email, as there is frequently something I want to read. This story is nothing short of insulting and was a complete waste of my time.

Having said that, I suppose the Dittoheads out there will be cheering, and I expect you will have earned some references for your website from the right wingnuts.

Congrats.

Rick Brooks Blankinship & Foster, LLC Solana Beach, CA

Robert Huebscher responds:

Rick,

After much reflection, we decided to re-title the article "Politics and Fund Managers." That title better reflects the intent of the study, which was to more broadly understand the ways in which political leanings affect investment results.

Bob

The following letter is in response to Adam Apt's article, Jim Cramer Exposed: Does He Generate Alpha?, which appeared two weeks ago:

Dear Editor,

Let me begin by saying that I am not a supporter of Jim Cramer's Mad Money program.

I have a big problem with articles like the one by Apt and academic studies like those by Bolster and Trahan. Their methods and conclusions may be logical and statistically correct, but are they important or even useful to an investor or an investment advisor? I believe they are not useful to investors and are only suited

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for publication in an academic journal. Their problem is in the benchmark that they are using for comparison with Cramer's stock picks. It is irrelevant to an investor/speculator whether Cramer beats an index chosen in the study, whether he produces alpha or whatever else comes out of the study, because the likelihood of Mad Money viewers using the benchmark index for their investing is nil. More important is whether an investor who follows Cramer's picks or an academic who simulates his buys and sells produces alpha over what a random sample of viewers of the Mad Money show would have achieved based on their own investment behavior. Even an zero-alpha stock picker like Cramer will outperform the collective "wisdom" of a group of amateur Mad Money viewers, also known as "the crowd." Thus, they may be better served by using his stock picks versus whatever they would have chosen on their own. I am not arguing that these investors would not be better off using the benchmark index, but a television show based on two professors discussing the actual benefits of using a passive index would not have an audience size even remotely comparable to Mad Money. Cramer may actually be performing a service for many of his viewers. Bob Mantovani, CFP

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