Week 5: Case 3A: Martingale Asset Management or Case 3B:
Tremblant Capital Group
For this Case 3A or 3B Assignment, you will review and select one of the case studies
to investigate further. Once you have made your selection, you will examine the case to
determine behavioral biases and asset pricing.
Case Studies
Behavioral Biases and Asset Prices: More Applications
Viceira, L. M., & Tung, H. H. (2008). Martingale Asset Management LP in 2008,
130/30 funds, and a low-volatility strategy (HBS Case No. 9-207-047). Retrieved
from Harvard Business Publishing
https://cb.hbsp.harvard.edu/cbmp/access/37227892
Greenwood, R. (2010). Tremblant Capital Group (HBS Case No. 9-210-071).
Retrieved from Harvard Business Publishing
https://cb.hbsp.harvard.edu/cbmp/access/37227892
Activity
For this activity:
Review the case study abstracts about each of the case studies presented in the
coursepack from the Harvard Business School Publishing website and decide on
which case you want to focus on for this case study Assignment (Note: See the
downloading tutorial at the end of this document for help)
Next, review the case study for this week’s Assignment
To complete this Assignment:
If you choose Case 3A: Martingale Asset Management:
Write a short report (not more than 5 pages, double-spaced), developed around the
following questions:
1. What do you think of Martingale as a firm? Does it have an edge in investing?
2. Which issues should investors consider when deciding whether to invest in a
130/30 fund? Is Martingale well suited to manage 130/30 funds successfully?
3. In your view, are 130/30 funds just a trend in investing? Or are they likely to
replace traditional long-only investment mandates?
4. Is it a good idea to invest in low-volatility strategies? If so, is a 130/30 structure a
good way of doing it?
5. For which investors are low-volatility strategies appropriate?
If you choose Case 3B: Tremblant Capital Group:
Write a short report (not more than 5 pages, double-spaced), developed around the
following questions:
1. What types of biases prevent analysts for updating their forecasts quickly?
2. Do you think investors can exploit these analysts’ biases even now? Why or why
not?
3. Why do analysts behave in a less sophisticated manner than institutional
investors?
4. Are there other market participants who exhibit similar behavior? Are there any
pricing implications of their slower reaction?
