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Imagine you are in a phone interview with a fund. They ask you where you see alpha in the economy right now. What do you say?
Let's say you say a certain industry is forecasted to do well, while another is posed to do bad. They ask you how you would trade to take advantage of this.
Let's say you go with a simple answer (because you're not alpha) and say short the bad buy the good. They then ask how you exit such a strategy.
Are they asking for more than just "close out your damn position"?
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Woah woah woah, the first question they ask or try to deduce is: Are you Jewish?
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given
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>>1939672
this.
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>>1939661
>Let's say you say a certain industry is forecasted to do well, while another is posed to do bad. They ask you how you would trade to take advantage of this.
im only an econ major, but wouldnt this simply mean that the information is already in the price?Even if you take the position that markets aren't efficient, you would still need to estimate how '''the market''' deviates from the forecast as is and if the forecast is any good to begin with- or at least what are the components that can make it go wrong- i.e. elasticities of demand for the good change entirely or something drastic like that
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>>1939661
Just tell them Buy the dip.
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>>1939661
automation, healthcare
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Interesting question. If you identified alpha, you bag the profit and exit the position to invest further. As you wait more within the position you profited from, potential alpha gets smaller so you get an early exit as soon as your gains are reflected in the securities you chose to short/buy
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