WEST PALM BEACH, FL (www.hedgeco.net) – Dr. Joe Scifers, hedge fund manager and investment newsletter publisher says something is wrong with Wall Street and its process. Scifers believes that thestock market is still the best investment available. He said, “From 1986 to 2002, the S&P 500 averaged 12.2% per year — even with the ’87 crash, the dotcom train-wreck, and the 9-11 tragedy,during the same period, investors, with the help of their brokers, averaged 2.6% per year. The first number confirms that the stock market continues to be the best investment available; the secondnumber reveals that there is something terribly — perhaps terminally — wrong with the investing profession.�
Scifers believes that the Wall Street system is structurally wrong. He noted, “Investors have been brainwashed into accepting below average performance — notably by the dubious Efficient Market Hypothesis which posits that it is impossible to consistently beat the market because everyone knows all there is to know about the market. By implication, the skill and ability of individual managers make little or no difference.�
According to him, hedge funds have been wrongly blamed for numerous problems currently facing the markets. Hedge fund managers are simply hard working individuals who make money because of their hard work and skills. He said, �In my opinion, Wall Street is flatly not doing its job, at every major brokerage in 2003, the ‘sell’ recommendations outperformed the ‘buy’ recommendations. And blaming it on hedge funds is equally wrong. Press reports of hedge fund abuses are mostly anecdotal and apocryphal — as opposed to the hundreds of millions of dollars in actual fines levied on brokers and mutual funds recently.�
Scifers believe that hedge funds work because their managers have the incentive to perform, and they receive incentive fees because they earned them. On the other hand, well performing traditional investment managers are not compensated in line with their achievements he explained. Scifers earned a doctorate degree from the Harvard Business School. He graduated from the US Naval Academy, and holds graduate degrees from Stanford and Columbia. He has worked at the Rand Corporation, the CIA, and in the White House.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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