Free Stuff Friday

[REWahoo]

For those interested in sizing up Mr. Malkiel's personality and presentation skills, here's a video interview posted today:

Princeton's Malkiel Interview on Economy, Strategy - Video - Bloomberg

I enjoyed this quote:

Telling people you can't beat the market is like telling a six year old Santa Claus doesn't exist. It's very hard, the six year old doesn't want to believe it.

 

[Nords]

Telling people you can't beat the market is like telling a six year old Santa Claus doesn't exist. It's very hard, the six year old doesn't want to believe it.

"If Santa isn't real, then will I still get my [-]market-beating returns[/-] presents?"

 

[Onward]

Princeton's Malkiel Interview on Economy, Strategy - Video - Bloomberg

Good video. Thanks for the link. I have forwarded it to Jim Cramer.

 

[NW-Bound]

Malkiel is absolutely right that an investor would be wasting time to find a MF manager to beat the market for him. Past studies show time and time again that no MF managers have been able to consistently beat the market.

If an investor wants to beat the market, he has to do it himself. It is admittedly a quixotic task, but one aspires to do that, he better tries his hand at the market himself instead of looking for a "hot" MF manager to do it for him.

I do not think the MF managers are all dumb. In fact some of them may be plenty smart, but they do not operate with the freedom of a small individual investor. I believe the main reason a successful MF manager often failed after a string of good years was that, as more money flowed into his fund, it reduced his mobility to make good trades due to the fund size.

A similar story was often told about Peter Lynch. From Wikipedia,

In 1977, Lynch was named head of the then obscure Magellan Fund which had $18 million in assets. By the time Lynch resigned as a fund manager in 1990, the fund had grown to more than $14 billion in assets with more than 1,000 individual stock positions.​

It was said that Lynch was smart to call it quit while he was on top. Sure enough, his successors at Magellan never could do as well. However, the fund continued to grow to $100 Billion in the late 90s based on its reputation. After its performance sizzled out, its asset is now at $19B.

 

[Nords]

It was said that Lynch was smart to call it quit while he was on top.

IIRC he was burned out to a crisp by fund bloat, and "smart" didn't have much to do with his decision to get out while the gettin' was good...

 

[TromboneAl]

Free luggage tags from KLM (made with a picture you upload).

KLM | Facebook

 

[deserat]

Thanks TAl - just made mine! One thing, you must undo the account security for secure browsing to see the link.