
Nevada’s $35B fund manager does as little as possible, usually nothing - breck
http://www.wsj.com/articles/what-does-nevadas-35-billion-fund-manager-do-all-day-nothing-1476887420?mg=id-wsj
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keithpeter
_" He generally doesn't work outside 8 a.m.-to-5 p.m. hours. He commutes in a
2005 Honda Element with over 175,000 miles on it. His 2015 salary was
$127,121.75, according to a Nevada Policy Research Institute database."_

Seems like a fairly careful kind of chap.

 _" Despite the investment success, Nevada only has about 73% of assets needed
to fund future retirement obligations to workers."_

I'm wondering what they will do about that. Increase contributions to new
members? Increase employer's contribution (if any)?

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danieltillett
The same that way that all sovereign debt problems are solved - higher taxes
if possible and default if not.

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Shivetya
Hope no one thinks you are being snarky, but court cases have come to that
conclusion more than once and it includes cases where the pension fund lost
money in the market or suffered theft. In all cases the taxpayer is on the
hook for the difference.

Now a recent case in California suggests that pension agreements can be
adjusted but I expect that to lose on appeal. Regardless more states and
cities will have to go to court to fix their overly generous pension
agreements (even in my state the number of double dippers or pensioners with
70-100k incomes from pensions is high)

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bradleyjg
There's two different types of laws in play. One has to do with already
accrued and vested pensions. Under federal law those are tangible property
that can't be adjusted outside of bankruptcy.

Separately some states, including NY, IL, and CA have state constitutional
doctrines that forbid changing the accrual formula for existing employees.
This is much more stringent rules, and means that any change will take many
decades to work through the system.

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keithpeter
I can see that the second regulation would slow down change significantly. The
first paragraph I think is fairly general.

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grecy
> _" He generally doesn't work outside 8 a.m.-to-5 p.m. hours. He commutes in
> a 2005 Honda Element with over 175,000 miles on it._

Really, really strange that both of those things are stated as if they are
inherently "bad".

Shouldn't that be the goal of every office worker? Work relatively sane hours
and be content with the perfectly functioning vehicle you already have.

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icebraining
I don't think they're stated as bad, just as surprising given common
perceptions of people in those roles, which is usually shaped by movies like
_The Wolf of Wall Street_ , since most people have no other window into the
lives of top-level executives.

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tschwimmer
As much as I'm a fan of passive investing, I think there are key differences
between personal investing and institutional investing. The article mentions
that much of the money is in equity indexes. This strikes me as very risky for
a pension fund. What if the market tanks? Presumably the value of the fund
will plummet, but he fund will still have to pay out benefits. This is the
equivalent of buying high and selling low.

A big part of the job of institutional investors like pension funds and
endowments is investing in stable, uncorrelated things. This is trickier where
it sounds and accounts for at least some of the higher overhead at other state
pension funds.

~~~
Someone
_" What if the market tanks?"_

It would have to tank long term. If it does, it would take an exceptionally
good and somewhat lucky fund manager to constantly find places where the flow
goes against the tide and thus still make a good profit. Also, the larger the
fund, the larger those places where the flow goes against the tide have to be
to make any reasonable impact, and those larger places are rarer.

So, if there is a long term problem, it's hard to avoid. For example,
obligations in solid economies are stable income sources, but currently all
bring little or no interest. That's something that hits pension funds fairly
hard now.

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jgalt212
It seems fitting that the guy from Nevada knows it's better to bet with the
house than against the house.

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cesarbs
If anyone is curious about their asset allocation, here's a recent document
detailing it:

[https://www.nvpers.org/public/investments/pers/PERS-
Investme...](https://www.nvpers.org/public/investments/pers/PERS-Investment-
Policies.pdf)

Pretty vanilla 3-fund portfolio plus 10% split between private real estate and
private equity.

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geocar
I'm a bit surprised that taking the link into Google and clicking on WSJ links
from Google don't show the full article anymore.

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achow
Incognito works.

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geocar
Thanks for that.

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ensiferum
Click bait. Doing nothing relates to he fund he's managing, i.e. his trading
policy is to do nothing.

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tanderson92
The WSJ is not currently in the business of clickbait. This is a substantive
article related to the superior _passive_ investment strategy of a state's
pension manager.

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ensiferum
"What Does Nevada’s $35B Fund Manager Do All Day? Nothing"

This title implies that he manager does nothing all day long. But when you
read the article it comes clear that doing "nothing" is his trading policy.

"His daily trading strategy: Do as little as possible, usually nothing."

I consider this a click-bait.

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cheriot
He does nothing like programmers value laziness. It's harder than it sounds.

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ptaipale
Definitely. That's why saying "he does nothing" is a bit clickbaity.

