Numeric Investors manages a portfolio of stocks with momentum model and cost. Momentum model is based on revenue surprise and analysts revise their earnings estimates. The company offers long-short and long only strategies, and its approach is to a high turnover of the portfolio. Numeric has experienced rapid growth in assets under management, which led to an increase in costs of the transaction. The company has already closed many of its products for further investment, and you need to decide where to go next. The case provides a rich setting in which to discuss investing, momentum investing, performance analysts earnings estimates, the stock market is efficient, long-short investment, transaction costs, the relationship between assets under management and performance, performance fees, and business strategies of companies investment management. "Hide
by Andre F. Perold, Brian Tierney Source: Harvard Business School 37 pages. Publication Date: July 10, 1997. Prod. #: 298012-PDF-ENG
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