Bloomberg Surveillance Single Best Idea with Tom Keene: Barry Ritholtz & Gene Munster
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Jul 15, 2025 Discover how alpha and beta impact investment performance, particularly regarding the S&P 500. Learn about the importance of core portfolios and the exciting potential of stock picking, enhanced by artificial intelligence. Delve into the unique strengths of various AI models, including OpenAI's GPT and others, as experts discuss their capabilities and how they shape investment strategies. The conversation navigates the evolving landscape of finance and technology, offering fresh insights for informed decision-making.
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Index Core with Stock Decorations
- Barry Ritholtz explains that most stock pickers underperform broad market indexes.
- He advises building portfolios around broad indexes (beta) and then adding select stocks for potential outperformance (alpha).
Secure Beta Before Alpha
- Avoid relying solely on picking stocks to outperform the market as it is risky.
- Guarantee yourself market returns with broad indexes before trying to add extra alpha.
Manage Alpha Considering Time Decay
- Tom Keene highlights theta as the time decay in investment value, influencing when to seek alpha.
- He suggests relying on core index investments for long-term growth and only cautiously adding other investments over time.
