If an investment manager is a baseball player, then their success or failure in beating (or at least meeting) an index is their batting average. The batting average is essentially determined by taking the number of relevant time intervals (days, months, etc.) in which the manager bested or met the index, and dividing it by the total number of that interval for the period in question, then multiplying by 100.
For those who don't keep up with baseball (or investment management trends), high batting average = good; low batting average = not so good.
Let's say it's October 28, 1910 and an investment manager named Tyrus Cobb wants to see their batting average since the beginning of the year (a period of 300 days). Tyrus (we'll call him "Ty" for short) met or beat the index 110 times. So, our calculation is: (110/300)x100= 36.7. With that kind of average, he should have been a baseball player.
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Finance: What is a High Alpha Investor?5 Views
Finance a la shmoop what is a high alpha investor? alpha dogs you know um fear em, [Arrow points to dogs]
love em feed em alpha is good okay okay more specifically it's an
investing term synonymous with smart if you have lots of alpha then you are
smarter than the market so a high alpha investor is someone who beats the market
while taking low risk ie not a lot of leverage not super volatile
stocks per se or crazy categories like crypto currencies and they didn't just
go by 20 bucks of California lottery tickets and then win alpha is well
kind of a newish term in Modern Portfolio theory which is a thing [Modern Portfolio Theory book appears]
apparently that signifies that this fund manager or mutual fund is pretty awesome
and we can quantify that awesomeness with a number which we call alpha well
what does this number mean? well a 2 indicates that the fund or investment
performed at 2 percent better than the benchmark index and minus 7 is a 7 percent
in the wrong direction and stuff like that and as we all know an alpha dog [Dog chewing a bone]
will eat numbers like that for breakfast so high alpha good low alpha bad
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