Walkinwood saw the point that I repeatedly tried to make, and I am sure some other readers do too.
We of course all know one year performance means nothing, so we have to look at long-term performance for consistency. It's no different than batting average for baseball, a game which I really know very little about but guess that it would make a good analogy.
I am sure that only a few MFs can show long-term performance, however we are going to define it. Is long meaning 10 years, 20 or 30 years? And then, people will still say that the manager was lucky. Or they will say that even if it is the manager's skill, he will retire or die some day. See, I know all about the indexer's arguments, because I have read their stuff.
I have read and was told that some MFs have a committee who pick stocks and also decide what and how to sell/buy based on
some metric that they maintain. With them being active stock pickers, I am sure it would involve some stock valuation as they do not buy the entire market but only segments of it that they think are more promising.
So, any performance would be due to the metric, which should outlast a single manager. An indexer may ask "but can the condition change, so that the metric stops working?" I can then ask if the market condition would change so that stocks would no longer be worthwhile to own and we should all buy CDs and annuities? See what we get into if we ask questions like that? We have to assume some basic things will stay constant, else there's no point in saying anything is better than something else.
So, who are these guys that can beat the market? I am no finance advisor, having no Web site of my own, nor being affiliated with anything on Wall St. So, I do not have records of MFs, nor the time or inclination to do extensive research. But after just a few days on this forum, I kept seeing "Pssstt Wellesley" from unclemick, and then learned that it was a quite popular MF here.
I put a bit of my money into Wellesley and also Wellington, but still wanted to check them out further. After 2 or 3 years, only recently did I bother to do a bit of work to study their performance. As these funds rebalanced between stocks and bonds, I wanted to see how they fared against an investor who did the rebalancing portfolio himself using a long-term bond fund and a total-market stock fund.
Results are shown here:
http://www.early-retirement.org/for...-hapless-y2k-retiree-69942-2.html#post1398567.
Both Wellesley and Wellington did significantly better than the indexing investor who rebalanced on Jan 1st of each year. Are there others like these two? I do not know, but there might be.