Source of the alpha.

Source of the alpha.


what are the sources of alpha?

If you make a portfolio of equity, it is hard to make alpha every year(or almost of the year)

almost of the mutual fund follow the index of market. and some times, some fund get alpha but it's not exist consistently.

so the fund that has consistent alpha must have something different to others.

what is that?

if you work in finance industry, you might guess this issue. and if you have get answer on this question. you might be famous portfolio manager.

I always think about that.

in mid-century,  philosophers thought about the life, existence, god ets.

portfolio manager also think about how to make alpha.

so if I have time I go to library and read many books about equity investment like Warren Buffett's investment.

 yeah, I still have been thinking about it. and think and back-test thinking.

the onething I get from this process, there is no rule that work well every year or every situation.

however, there are rules that working well in some situation, in some periods like bull market, bear market.

so portfolio manager have to know now is which market. and then apply good strategy and rule of making PRT.