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I’m reading the book “The Outsiders” by William Thorndike and in it he claims “[Warren Buffett] has never had a stock ticker [in his office]”.

I understand Buffett is an extraordinarily unique case, but more generally, do hedge fund managers and the like track daily movements in their portfolio value? Half of me says they must because it’s their job and the other half says they would get driven crazy on down days.

I know the answer is going to be some do and some don’t, so any sources would be helpful.

  • I think what you're really asking is "Do ' hedge funds ' trade short term or long term?" The answer is, there are plenty of each variety in the hedge fund scam. Then in answer to your question, of course yes, obviously, short term traders continually watch the markets. – Fattie Aug 20 '18 at 6:37
  • "they would get driven crazy on down days" ..you're thinking about actual traders. ie, you or I take our own money - and trade it. In the hedge fund scam, people give Person X money to trade (no .. really). If the account goes up, Person X takes a big fee. If it goes down, Person X takes a big fee. (Again .. no .. really.) Person X couldn't care less if it goes up or down. The Fund "business" works like this: a company will start many funds 10, 20. Randomly, one of them will be profitable for 2 or 3 yrs running. You then heavily advertise that fund as profitable! That's the basic mechanism. – Fattie Aug 20 '18 at 6:40
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Simple answer: it depends significantly on the liquidity of the assets being managed, and the mix of liquid (e.g. listed stocks) and illiquid assets (e.g. the unlisted equity of a wholly owned subsidiary).


The term you want to search for is "fiduciary duty". It applies broadly, if not necessarily equally, to asset managers and corporate managers in the US (with varying application elsewhere). Those managers have discretion in how they act in order to meet the standard of fiduciary duty but this must be balanced against the risk of legal action by beneficiaries (example).

hedge fund managers and the like

That's a sweeping generalization. If you mean to say, 'managers of offshore funds that are more lightly regulated than a typical US or EU mutual fund', then you are trying to pigeonhole an overly broad range of behaviors.

A key question to ask is whether a manager (either corporate or investment fund) bound by fiduciary duty is acting prudently. If you manage a company whose holdings of tradeable securities are, say, 10% of total assets, perhaps you can argue that prudence does not require you to watch those asset prices in real time. That is not the same as ignoring price movements: it seems safe to assume that Warren Buffett has at least one employee who will inform him if one of his tradeable assets has experienced a big gain or loss.

If you are fund manager ("advisor", etc.) serving US clients and you manage a fund whose NAV is principally invested in tradeable securities with daily prices, it would be much harder to argue that you were acting prudently by ignoring daily asset price changes. At a minimum it doesn't seem like something to brag about. In my opinion that is exactly why some business or fund managers highlight their aloofness: to draw attention to their different managerial style as compared to a traditional fund manager.

A hedge fund that invests in illiquid assets without a visible secondary market might not have any ability to "track" prices passively. They may have to make their own prices. Absent new information about the asset or secondary market activity, today's price is yesterday's price -- you don't need to check it.

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"Hedge funds" is a very broad term that includes a wide variety of strategies.

At one extreme, some use algorithmic strategies which trade many securities many times each day.

At the other extreme, some hold distressed debt or other securities which do not trade often. As a result, it would be difficult to monitor daily price moves.

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