Beta late than never: HSBC

Why do markets behave as they do? Even in the age of algorithmic trading, where 60% of stock trading execution decisions are computer-based, emotions of fear and greed still prevail. An HSBC European equities research piece on fund manager positioning notes this very human concept as causation for certain market moves. Then it turns the tables, offering a mean reversion concept to point investors in a “bet against the herd: Beta late than never” method to benefit from pain or gain emotional investing decisions.

Taking emotions out of investment decisions has always been a key objective

It’s no secret that certain discretionary hedge fund managers have historically been subject to emotional...