Learning from Medellín with Alejandro Echeverri

“I think, if you want to write a new narrative at some specific moment in the story of a city, it is important that you have to feel the transformation and see the transformation. So the physical transformation is important but always there is more a spiritual thing, as happens with emotional connections and inspirational things.” ______Architect Alejandro Echeverri.

EcheverriPhotoIf you have an interest in Latin America or in urban matters, you will have read by now that the city of Medellín, Colombia has undergone a startling transformation in the past fifteen years. In the 1980s and 1990s, the name of Medellín evoked fearsome drug cartels, violence and terrorism.

But in the 2000s, Medellín took a dramatic turn for the better. In 2012, it was selected from 200 contenders as Innovative City of the Year in a survey organized by the Wall Street Journal and the Urban Land Institute. Today, it features regularly among lists of forward-looking cities and must-see destinations. Read more

The Way Forward for Hedge Funds – 2

In the first installment, I made a case that hedge funds can regain their popularity by reverting to their initial mandate which was to be hedged. I examine here how such a model hedge fund would have performed in the past 50 years if it had returned:

  • 0% in all years when the market was down.
  • 75% of the market gain in all years when the market was up.

In essence, this fund only has a chance of outperforming the S&P 500 in the long run if the market has a big down year (say 10%+) every few years.

So what do the past 50 years tell us? Read more

The Way Forward for Hedge Funds – 1

Hedge funds should go back to hedging and also consider lower fees.

Equity hedge funds are under tremendous pressure, having underperformed their benchmark in nearly every year since 2008. But can it really be true that the average equity hedge fund is no better over the long run than granny’s passive indexed ETF or mutual fund that tracks the S&P 500?

On one side, hedge funds employ full-time cohorts of smart ambitious highly credentialed people who spend long hours and a lot of money visiting and analyzing companies to find the best opportunities. They sit in beautiful new offices and use the latest in real-time data feeds and state of the art technologies. Read more

Architecture by Walking Around

Something a little different for our readers in this holiday season. Happy holidays to all!

The phrase “management by walking around” became popular in business circles in the 1980s and 1990s. Its import was that a corporate manager at any level, even the CEO, should not just manage from his distant marbled office at the top of headquarters but should walk around the office, the factory floor, the store, holding impromptu conversations with colleagues, suppliers, customers etc. Only then, the theory went, would he get a full picture of operations and only then would he adequately lead his organization. Read more