Jon Hamm, CEO of California Association of Highway Patrol Officers and amateur economist, called the debacle  (WSJ Blog: Calpers should have listed to this bubble predictor ) (albeit a bit early, his letter was dated February 4, 2003).

Corollaries to Doc's axiom (to paraphrase)– that everyone has a position even if they don't have a position:

1. It is one thing to have an opinion but another to act on it (especially shorting a massive run-up)

2. There is no such thing as an amateur investment manager. Even if one does not want to make decisions and delegates, the delegator, the amount delegated, and timing of funding/withdrawal must be chosen.

3. Professional asset managers do better than self-directors, except when they don't. No matter how bad you are, if you want to feel better about your results check out Barclay's (or other) Hedge Fund and CTA returns databases. (You will feel worse, however, about your management fees).

Not inconsistently, the pension-fund director recipient of the letter has been sued:

"Buenrostro was recently named as a defendant in a civil suit filed by California’s attorney general. It alleges that as Calpers chief executive he improperly accepted gifts and got a standing job offer from a middleman trying to secure investments from the fund. Through a lawyer he has denied wrongdoing. He didn’t comment about the letter."


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