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Standard Deviation Related News
in chronological order

See also: Standard Deviation Related Books, Standard Deviation Related Scholarly Papers, or Standard Deviation Home Page.

Table of Contents:

June 2006
- June 5 - Scared of equity? Try commercial paper
- June 4 - Hail, Columbia
January 2006
- January 31 - The Allure and Illusion of Mechanical Investing: Part 2
- January 31 - Resolute Growth's Stanley bows out on a high note
- January 29 - How's your money manager doing?
- January 26 - The ETF Approach to Tech Investing
- January 25 - Merger Fund Wants Part Of M&A Action – Again
- January 24 - What the Smart Money Thinks
- January 20 - Buying a Dollar of Assets for 60 Cents
- January 12 - A Behavioral Approach to Funds

Scared of equity? Try commercial paper

June 5, 2006

From NationMedia.com:
A little-known asset class that offers varying levels of low risk coupled with return above Treasuries exists in the Kenyan market, and you may be already invested.

Commercial paper is a subset of the corporate bond asset class offering lower risk with enhanced yields and a diversification benefit that will benefit any investor’s portfolio.

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Hail, Columbia

June 4, 2006

From Barron's Online:
SHAPING UP IS HARD TO DO, especially if you're a firm with too many overlapping funds, a mixed investment record and the taint of the recent mutual-fund scandals.

But Columbia Management, part of Bank of America (ticker: BAC), is making progress. An amalgam of funds cobbled together under the 2004 merger between Bank of America and FleetBoston, Columbia has about $494 billion under management, including retail and institutional accounts. About 35% of its assets are in money-market funds.

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The Allure and Illusion of Mechanical Investing: Part 2

January 31, 2006

From The Motley Fool:
Thanks for sticking around with me through part 1. Now that we're here, we'll take a look at some tools for developing a mechanical strategy and some of the more subtle points. Fortunately for you, legendary Fool members mghens and keelix are dedicated to mechanical investing, and they post an updated list of many stock screens on a weekly basis at the Fool mechanical investing discussion board. Mghens lists stock screens based on Value Line data and keelix lists stock screens based on AAII's Stock Investor Pro (SIPRO) data. They also have their own websites here and here (keelix's site requires free registration). Both provide updated weekly lists of the stocks generated by the most popular mechanical screens -- developed over the years in the Foolish Workshop -- and later, on the discussion board.

But, you may ask, what good are screens without the ability to verify their usefulness through backtesting? One backtesting resource comes from another legendary Fool member, Zeelotes, who recently backtested many of the Value Line and SIPRO screens over the eight-year period of 1997-2005. For purposes of the backtest, he assumed that one picked the top five stocks from the screen and rebalanced the portfolio on a monthly basis. The no. 1 ranked screen from Zeelotes' study is a SIPRO screen called "P/S I Love You." The P/S stands for "price-to-sales ratio," as in the lower the better. The full screen definition can be found here.

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Resolute Growth's Stanley bows out on a high note

January 31, 2006

From Morningstar:
When he pulls the plug on Resolute Growth four months from now, Tom Stanley will close the books on one of the fund industry's most remarkable track records. Stanley's Toronto-based boutique, Resolute Funds Ltd., confirmed on Jan 24 that it would terminate the fund on June 2.

Over the 12 years since it opened for business in December 1993, Stanley's concentrated portfolio of mainly Canadian small-cap stocks has been a veritable money machine.

Since inception, the fund has returned a compound annual 27.7% to December 2005, compared with 2.2% for the median Canadian Small Cap Equity mutual fund and 2.3% for the BMO Nesbitt Burns Small Cap Index (Weighted) over the same period. The 10-year return is 33.1%, the highest by far of any fund in any category in the entire Morningstar Canada database.

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How's your money manager doing?

January 29, 2006

From Palm Beach Daily News:
Now that we're still in the beginning of a new year, why not put your money manager to work?

Ask him or her to give you an "evaluation of your investment portfolio's risk level."

By knowing how risky your investments are, you can determine whether you should be making adjustments to protect yourself in the event of a market downturn. Or, if you're still young and have decades to retirement, perhaps you should be taking more risk than you are.

There are several measures financial professionals use to evaluate risk or volatility.

The simplest way: Look at all the investments you have and compare their overall return year by year in up and down markets over at least a decade. If you're seeing wide swings, chances are some of your investments may be too volatile. Consistency is key.

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The ETF Approach to Tech Investing

January 26, 2006

From TMC Net:
While some mutual-fund managers might have scaled back on the volatile technology sector, other investors seek to better control or increase their exposure to the sector -- and they have a new tool at their disposal, namely exchange-traded funds.

Many ETFs not only track popular technology indexes and even subindexes but are also inexpensive to own, provide immediate sector exposure, and can be bought and sold intraday or sold short by savvy investors looking to make tactical sector bets. In addition to this trading flexibility, ETFs can also be held for the long haul, like open-ended index mutual funds.

PROFITABLE DEVICES. Scott Kessler, Standard & Poor's director information technology equity research, takes issue with those who shy away from technology stocks on the basis of poor fundamentals. In fact, he finds valuations reasonable and fundamentals improving enough to revive interest in the sector again. In May, technology stocks outperformed the broad market, rising nearly 8%. Year-to-date as of the end of May, however, tech stocks are still under water, having slipped 4.3%.

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Merger Fund Wants Part Of M&A Action – Again

January 25, 2006

From Institutional Investor:
Low-risk merger arbitrage may seem like a contradiction in terms. But a decade ago, Barron's declared the Merger Fund, which – you guessed it – engages in a merger arbitrage strategy, "one of the safest stock funds you can buy." The shoe still fits. The fund boasts a beta of 0.25, making it 75% less volatile than the Standard & Poor's 500, and is more than a full standard deviation lower than the mean for mutual funds.

With the mergers and acquisitions market heating, and a growing number of so-called hedge fund-like mutual funds beginning to crowd the field, the Merger Fund is set to rejoin the fray; the fund is reopening to new investors today, after staying shut for almost two years.

"We closed the fund again in March of 2004," co-portfolio manager Bonnie Smith explains, as M&A activity slowed and "we just felt at that point we didn't want any new money coming in."

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What the Smart Money Thinks

January 24, 2006

From TheStreet.com:
Every January, a group of the smartest money minds in my hometown of Chicago gets together for a luncheon sponsored by Free Market, an economic consulting firm that provides data analysis and insights for institutional money managers. The 18 guests are asked to make predictions of the high, low and closing numbers for the Dow, Nasdaq Composite, fed funds rate and 10-year Treasury note.

The competition for the forecasting prize, the Eagle statuette, is fierce. Individual scores for last year's predictions for each of the categories are ranked to the decimal point and adjusted by mean error and standard deviation. Category winners get a tacky, home-made certificate, which I've actually seen displayed in some money managers' offices! In the nearly 20 years of this contest, there have been a lot of ups and downs.

The real bragging rights go to the overall winner, who this year is well-known forecaster Jim Bianco of Arbor Research. I'll share his specific forecasts for the coming year, but perhaps of equal interest is the round-table discussion during which each participant gets a chance to share his or her reasoning for the numbers being submitted to the contest.

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Buying a Dollar of Assets for 60 Cents

January 20, 2006

From BusinessWeek Online:
To manage a global mutual fund with an opportunistic bent, it can't hurt to have an international upbringing and experience at a hedge fund. That's the case with Anne Gudefin, lead portfolio manager of the $8.3 billion Mutual Discovery Fund/A (TEDIX ) since May, 2005. Raised in France and Switzerland, Gudefin studied in Paris and New York and worked for hedge fund Perry Capital before joining Franklin Templeton as an analyst in 2000. When longtime manager David Winters left the fund, Gudefin inherited his title, though she stresses that the departure hasn't changed the fund's strategy.

Now based in London, Gudefin runs the fund together with New York-based assistant portfolio manager David Segal. The team draws on research from 15 of the firm's analysts, who include two specialists in merger arbitrage and four in distressed debt. The other analysts cover business sectors either on a global or regional basis, depending on industry.

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A Behavioral Approach to Funds

January 12, 2006

From BusinessWeek Online:
Rosemary Macedo uses a top-down, quantitative, multi-factor model to select stocks from around the world for the Bailard International Equity Fund (BBIEX ). Under her discipline, she seeks to create a broadly diversified portfolio by initially ranking countries, sectors, and individual securities according to various criteria and then evaluating their relative attractiveness. While Macedo and two associates use computer models to sift through mountains of data, she also takes a cue from behavioral finance, which focuses on why different investment strategies work and when they should work best.

Despite the small staff, the $169 million fund has handily outperformed its global-equity peers recently. For the one-year period through Dec. 30, the fund gained 20.7%, vs. a 14.5% return by the peer group. Over three years, the fund rose an annualized 27.6%, compared with a 22% showing for the peers. Over five years, the fund again beat the peer group, 7.3% to 3.6%. Based on its risk and return profile, S&P gives the fund its highest rank of 5 Stars.

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