| Credited by one buy-sider for his “unique ability to generate a significant quantity of research of an exceptionally high quality,” Yin Luo of Deutsche Bank Securities repeats in first place. Luo, 37, believes that macroeconomic factors will “continue to play a significant role in investing for the foreseeable future.” He is urging clients to incorporate macro views into their stock-selection processes with strategies like variance risk premium, which measures the difference between market-implied risk and realized risk. When the former is much higher than the latter, he explains, the market is in a panic mode and assets are overly depressed. This, he contends, is “a good entry point” to buy equities, high-beta stocks and cyclical sectors. Luo also suggests employing a relatively safer strategy that turns traditional finance theory on its head by betting that low-beta stocks are more likely to generate higher returns than high-beta stocks. Money managers would do well to build portfolios with lower-beta, less-volatile stocks that have low correlations to other equities, he says. |
Economics & Strategy – Quantitative Research: First
Credited by one buy-sider for his “unique ability to generate a significant quantity of research of an exceptionally high quality,” Yin Luo of Deutsche Bank Securities repeats in first place.
October 16, 2012
