Joe Peta on Baseball, Stocks and Performance Analysis


A Conversation with Joe Peta on Baseball, Stocks and Performance Analysis by Elliot Turner, Compounding My Interests

I’m very excited to share my interview with Joe Peta here. Joe is the author of Trading Bases: A Story About Wall Street, Gambling and Baseball and Managing Director at Novus. As you may realize from the title, Trading Bases combines (compounds) a bunch of my interests. In his work at Novus, Joe Peta has been doing some groundbreaking research on performance attribution by dissecting volumes of individual fund and investment manager performance records in order to gain deep insight into how to identify the true drivers of alpha. His insights for traders and investors alike from years of experience on trading desks, running his own hedge fund, and now studying some of the best alpha-makers in the world are incredibly valuable for anyone looking to make money in the stock market. Plus Joe Peta’s outlook on life, whereby he took a challenging physical injury and turned it into an intellectually stimulating and ultimately rewarding experience in baseball betting is both inspiring and a great lesson for all in critical thinking. I’m very thankful that Joe Peta took the time to discuss some of these topics with me here! Enjoy:

Elliot: Novus has been putting out some great stuff, particularly on the Julian Robertson and his Tiger Cub progeny, as well as European short interest. Can you talk a little about your role in Novus and your effort to build out the investing equivalent of baseball’s WAR–the WAGEs?

Joe Peta: Novus was founded by ex-Fund of Fund investors who were dismayed at the lack of use of analytics in evaluating fund managers. Despite the fact that study after study has shown that today’s fund winners correlate poorly with tomorrow’s winners, in 2007, our founders wondered why the entire industry of allocators (endowments, state and corporate pension plans, sovereign wealth funds, fund of funds, etc.) all based their allocation decisions on the same process: Review the 1-, 3-, and 5-year track record and have a face-to-face interview with the fund manager to see if “he gets it.”

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