So Baruch was having his introductory session with the new Head of Risk at his beloved employer, when he was posed the following question: “what would you do if 80% of the fund was in ‘Momentum’?”
“Well,” said Baruch, desperately trying to think of what the right answer was, “erm that would be good, wouldn’t it? I mean, ‘momentum’ would mean the stocks were going up, which would mean that all our picks were working, which would mean we were making money!” he concluded, with a cheerful, hopeful grin.
A chill settled over the assembled colleagues. A faint whistling sound was heard in the background. Tumbleweeds rolled through the room. Baruch’s more experienced colleague and Dear Leader leant forward. “Obviously,” he said, “Baruch is joking. In that case we would work immediately to reduce the preponderance of that style in the portfolio.”