What are the most common mistakes that portfolio managers usually make?

Sun Mar 24 2024

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What's the most common mistake that portfolio managers usually make?

Here are a few mistakes that portfolio managers would make: 

  1. Too rush in scaling up. Which usually ended up catching the last wave of up or down, meaning only catching beta.
  2. Putting too many names (>100) into portfolio while not knowing the earnings direction.
  3. Putting too little time in communicating with internal team, but rather take external opinion. Then blame the internal team.
  4. For platform HF PM, chasing momentum without fundamental support (no matter long or short side). Which usually ends up huge loss and rush loss-cut when earnings miss expectation. 

Next week we will discuss about how to improve these issues.

That's it for this week. Happy reading!