Portfolio Management at UTD
This semester I am auditing another class from UTD - Portfolio Management. The class teacher Kurtay thinks the name should be Institutional Fund Management. Basically he thinks that the time for security analysis is already gone. Now it is the time for asset allocation – strategically or tactically. In the second day of the class, the class last two and a half hours without interruptions for rests. Overall I like the teacher. His teaching of practical matters seems very interesting, especially for me.
There are about 30 students in the class. Many of them are graduate students. I think a few of them are not regular students. I talked with two students after the class. They are all graduate students but they have regular work besides schooling.
The teacher is from Turkey. His first name Kurtay is a combination of two words (Kurt means Wolf and Ay means the Moon). He said his parents gave him this unique name in the world. He has not yet met or known anyone with this name.
In yesterday class, Kurtay introduced many concepts in investment. His experience is mainly from the institutional side of the investment. He introduced the current structure for institutional investors.
Investors are usually corporate pension funds, university endowments, public retirement systems, and private foundations. The investors are usually organized as the boards which are to oversee all investment decisions.
Investment Consultants are to help the investors to write investment policies, investment objectives, investment constraints, and hire investment managers, mutual fund managers, hedge fund managers, and/or portfolio managers. Usually the investment consultants do not touch the green (money).
Investment Managers perform actual management of money. One special group is the fund of funds, which are the collections of other hedge funds.
He wants the students to have the above framework of institutional investment memorized so that his talk can make sense over the semester. He said that the current investment landscape would not change over the next five years. However, the concept of meta-consultants is emerging. Mcube Investment Technology (http://www.mcubeit.com) is one example along this line.
He introduced several behavioral finance concepts such as disappointment aversion, loss aversion, and regret aversion. I had heard about the loss aversion before. But it is the first time I am aware of the disappointment aversion and regret aversion. All these concepts are an integral part of the prospect theory. Another concept of prospect theory is mental accounting.
There is another psychological process – the heuristic decision which is comparable to the prospect theory. The heuristic decision processes involves overconfidence in decision making. The teacher has yet to introduce these behavioral finance concepts.
The investment theory based on the Markowitz theory has developed beyond the risk-return space for stocks. Now the theory has been extended to the asset classes. Different institutions have developed their own asset allocation models to capture the fruits of the new applications of an old theory. Ultimately the theory will be applied to all among all institutions, all assets classes, and all security analyses.
There are about 30 students in the class. Many of them are graduate students. I think a few of them are not regular students. I talked with two students after the class. They are all graduate students but they have regular work besides schooling.
The teacher is from Turkey. His first name Kurtay is a combination of two words (Kurt means Wolf and Ay means the Moon). He said his parents gave him this unique name in the world. He has not yet met or known anyone with this name.
In yesterday class, Kurtay introduced many concepts in investment. His experience is mainly from the institutional side of the investment. He introduced the current structure for institutional investors.
Investors are usually corporate pension funds, university endowments, public retirement systems, and private foundations. The investors are usually organized as the boards which are to oversee all investment decisions.
Investment Consultants are to help the investors to write investment policies, investment objectives, investment constraints, and hire investment managers, mutual fund managers, hedge fund managers, and/or portfolio managers. Usually the investment consultants do not touch the green (money).
Investment Managers perform actual management of money. One special group is the fund of funds, which are the collections of other hedge funds.
He wants the students to have the above framework of institutional investment memorized so that his talk can make sense over the semester. He said that the current investment landscape would not change over the next five years. However, the concept of meta-consultants is emerging. Mcube Investment Technology (http://www.mcubeit.com) is one example along this line.
He introduced several behavioral finance concepts such as disappointment aversion, loss aversion, and regret aversion. I had heard about the loss aversion before. But it is the first time I am aware of the disappointment aversion and regret aversion. All these concepts are an integral part of the prospect theory. Another concept of prospect theory is mental accounting.
There is another psychological process – the heuristic decision which is comparable to the prospect theory. The heuristic decision processes involves overconfidence in decision making. The teacher has yet to introduce these behavioral finance concepts.
The investment theory based on the Markowitz theory has developed beyond the risk-return space for stocks. Now the theory has been extended to the asset classes. Different institutions have developed their own asset allocation models to capture the fruits of the new applications of an old theory. Ultimately the theory will be applied to all among all institutions, all assets classes, and all security analyses.
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