Investors' Alphabet: S is for Sharpe ratio

  • Story by: Nick Rice
  • Magazine: InvestmentAdviser
  • Published Monday , September 01, 2008

Here's your starter for 10 for this week: can anyone remember how many Nobel prize-winners were on the board of Long-Term Capital Management?

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Few financial institutions played the "collect a laureate" game better than the giant fixed income hedge fund.

But despite its vaunted expertise, LTCM was the highest-profile absolute return failure of all time.

In fact, when it foundered in 1998 in the midst of emerging market economic crises, it was feared it might bring down the entire financial system.

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