The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
why aren't all 35 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 0 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Fundamental managers beat systematic strategies during the Brexit and Trump shocks
“And the big advantage I would say that fundamental managers have over systematic investing generally is their ability to React quickly to a new paradigm. And so when you get a big event in markets, you're typically at least for two or three months. And we had …”
Fund manager failures almost invariably stem from character, not lost skill
“We have a long-term conviction that skill is persistent, that if somebody is good, They stay good. Unless, almost invariably, when it goes wrong, it's actually a character thing rather than a skill issue.”
China's 85% retail market offers better theoretical alpha than the US
“That leads you therefore to look at China as a better source of alpha, theoretically at least, than the United States. Which is the most professionalized market.”
Success ratios between 50% and 60% prove skill is statistically persistent
“If you begin to see that the individual not only Consistently delivers alpha, but their success ratio is consistently between 50 and 60%, so they're consistently getting it more right than wrong. There's a skew in there, and then you can look at how that works…”
Marshall Wace became Europe's largest hedge fund by constantly capping capacity
“And the paradox about Marshall Waste is we've grown to be the largest equity hedge fund in Europe, Because, in my opinion, we constantly closed. Because other people grew to be big and blew up. Because they were too big.”
Mainstream economics' excessive reliance on axiomatic thinking will ultimately become discredited
“Excessive belief in the power of reason and the excessive reliance on axiomatic thinking, which is what happens in the economic profession. Ultimately, because it's flawed, it will become discredited.”
Marshall: The US education system 'absolutely stinks' at equality of opportunity
“And by the way, I think the US education system absolutely stinks in terms of providing equality of opportunity, and Britain's in a better place on that.”
Sell-side broker portfolios generated substantial alpha in Marshall Wace's initial trial
“And much to my surprise, because I was pretty skeptical about it, I had the typical arrogance of a buy-side guy, They actually generated a lot of alpha.”
Systematic contributors outperformed internal fundamental managers during the COVID-19 pandemic
“But I would say in the coronavirus, actually, it's been the other way around. The tops contributors did better than our fundamental managers in reacting to COVID.”
Marshall: Marshall Wace optimizes portfolio construction and capital allocation to alpha, not returns
“The thing you're optimizing is not a return objective. It's an alpha objective. So it's the performance of those ideas against whatever the benchmark is. And you create information ratios and risk manage around the alpha. And for our managers, it's actually th…”
Paul Marshall: Few stock pickers hold over 20 high-conviction ideas
“My view is that most Managers, few managers have more than 10 or 20 high convictions at any one time.”
Marshall Wace's Eureka Fund generated 9% long alpha versus 3% short alpha
“And if you look at the long-term record of the Eureka Fund as a proxy, our long-term annualized alpha on the long side is about nine percent, and our short side about three percent.”
Marshall Wace was the second-largest disclosed short seller in Wirecard
“We actually just had one of our best ever experiences as a firm on the short side, which was Wirecard, where we were the second biggest disclosed short.”
Post-2008 monetary regimes made shorting weak companies significantly harder
“For the last 10 years, the monetary regime Means that companies can just, even today actually, raise capital at the drop of a hat. There's always capital to help to bail out weak companies. Whereas there was a time when, I think pre 2008 actually, when if a co…”
Paul Marshall: Crowded Shorts Signal Quality but Spike Squeeze Risk
“The irony, of course, is that a crowdedness of a short Is a sign that it's a good short. Ah, it's going to go down, because smart money thinks you should be short. But, crowdedness of a short causes it to be much more volatile in the market. And when you get t…”
Marshall Wace expects ESG strategies to be a rich source of alpha
“We launched an ESG fund, and that's a very exciting area, which we, having been pretty cynical about it as an alpha source, we now think actually it's going to be pretty alpha rich.”
Marshall: Beyond a critical mass threshold, fund size is a disadvantage
“Although you need a certain amount of size to have critical mass and pay the bills, beyond a certain level, size is most of the time a disadvantage. And so it's a sadness to me in a way that there are so many barriers to entry now and that it is getting more c…”
Hedge fund egos are worse in America where wealth equals worth
“It's a very, it's a pretty ego driven industry for management, especially the hedge fund. And I would say it's even worse in the U S than the UK, because in the U S people equate your wealth with your worth.”
Paul Marshall: Genuine classical liberalism requires committing to universal education equality
“If you don't really commit to trying to Make education work for everybody, then you're kind of a fake, in my view, in terms of being a traditional classical liberal.”
Marshall: Undervaluation alone is insufficient without a market catalyst
“It's never enough for me to just be looking at understanding a long-term undervaluation, you've got to have a catalyst which will draw people's attention to the valuation.”
George Soros provided half of Marshall Wace's $50M launch capital
“We raised fifty million dollars of rich half was from Soros.”
US equity retail participation fell from roughly 85% in 1907 to 15%
“I think the US has gone from in the 19 seventies, 50% retail to today, 15. And I think in 19 oh seven, it was something like 85% retail.”
China's stock market is 85% retail and 15% professional investors
“And China today, Is 85% retail and 15% professional.”
Marshall: 70% to 80% of all broker recommendations are buy or hold
“70 to 80% of all recommendations are buy or hold. That's 50 plus percent of them are buys.”
Marshall Wace Uses Z-Scores to Quantify and Manage Short Crowding
“We have rules about individual stocks, both on the long and the short side, in terms of how big we can be in the positions. But we also implement it at the aggregate level. So we have a crowdedness factor. So we have a Z-score approach to measuring short crowd…”
Paul Marshall: Sole-owner hedge funds fail because nobody challenges the founder
“You also have the problem that in the hedge fund world, A lot of firms are a hundred percent owned by one person, and that compounds it so you get culture where there isn't enough challenge, there isn't enough, not enough people willing to contradict. The foun…”
Marshall Wace was roughly the third hedge fund established in Europe
“We were about the third hedge fund in Europe.”
Marshall Wace seeded its TOPS strategy with $200M from the Eureka fund
“And so we, having measured it for about a year, we then said, or Ian said, let's put some capital behind this. And we put, by that stage, Eureka was a kind of two, two and a half billion dollar fund. We put two hundred million, so 10% of the fund, into a progr…”
Marshall: Marshall Wace limits strategy capacity to force capital diversification
“So we've always worked on the basis, first of all, that we were size constrained in everything we did, and that led us to allow different strategies to develop their life and to distribute the capital as much as possible, really.”
Marshall: Marshall Wace operates around 15 fundamental strategies using quant inputs
“Then we have the fundamental side which has evolved from having essentially one strategy when we started to now there's around 15 strategies run by fundamental managers and Covering different sectors and different geographies, but they also then benefit from a…”
Over 3,000 contributors have been measured in Marshall Wace's TOPS system
“We have 1000, well, historically, upwards of 3000 people who have contributed to TOPS and been measured. For long periods. Three, five, 10, 20 years in some cases.”
Marshall Wace held its Wirecard short for two years before its collapse
“We held that position for two years, and then when it went like a puff of smoke, went from about a twelve billion dollar market cap to zero in three days.”
Marshall Wace closed its Eureka fund at $2B in 2001, returning capital
“And that's why we closed Eureka when it was two billion in 2001, gave back capital. And we've frequently closed our funds all the way through the life of the firm.”
Paul Marshall's biggest career mistake was getting wiped out on 1991 oil
“So my biggest mistake was in 1991, the first Gulf War. Saddam invaded Kuwait in August 1990. And then the U S invasion was until January, 91. And I got bared up on, on the oil price. I thought it was going to go up further and was very long oil, oil stocks and…”
Paul Marshall's son Winston formed Mumford & Sons from a pub scene
“He was playing guitar from early teens, and he decided very early on that he was going to go into the music business, and he set up a venue in the King's Road, which was kind of a little scene. He took over a pub, and he brought together lots of musicians, and…”