Am Funds Ad. Better than index(?).

[samclem]

And we should recognize that, while we may have direct experiences pro/con regarding managed funds, none of it amounts to evidence. No single person can invest in enough things, long enough, to gather the quantity of data needed to build a statistically significant case against active management. Just like if Q's Laptop invests in his faves for 15 years and comes out ahead of indexing, it would prove nothing.
Humans are >fantastic< at finding patterns, even (especially?) where they don't exist.

But by gathering a lot of data and studying it over time, useful knowledge >can< be gained. The academic studies have pretty much answered the question. At this time, there's no evidence that it is possible for investors to reliably choose a manager who can pick stocks that outperform the indexes (on a risk-adjusted basis).

In the marketing arms of the advisory firms, active management is still pushed because it is the most lucrative approach. Without the "secret sauce" of purported great stock picking, funds would just be competing on the basis of ERs and overall costs, which is a road to very low margins.

 

[Chuckanut]

Newbies on this site could learn a thing or two from the Russians who are trying to influence American politics and thinking.

They don't plunge in with strong statements that generate controversy but start by being very agreeable and reasonable. Often they are seeking help and advice. They don't take on the heavy weights that others respect. They are models of diplomacy, tact and being nice. Then as they gain credibility with the group they start throwing out things that bend the truth, just a bit. Remember all great lies have a degree of truth in them. Finally, they start to expend serious ammo on their goal - after all they are trusted members of the group and have creds.

Personally, I don't doubt that a few managers can beat the averages consistently enough to make a meaningful difference in an investor's net worth. My question is "How do I know today who they will be five to ten years from now?' My experience has taught me that today's winners are not necessarily tomorrow's. I remember investing in, IIRC, the Nicholas Fund and the Acorn Fund, only to find that they reverted to the mean in a few years. Michael Price did a great job with Mutual Shares, but then he sold the company and went on to other things.

 

[alaska55]

Newbies on this site could learn a thing or two from the Russians who are trying to influence American politics and thinking.

They don't plunge in with strong statements that generate controversy but start by being very agreeable and reasonable. Often they are seeking help and advice. They don't take on the heavy weights that others respect. They are models of diplomacy, tact and being nice. Then as they gain credibility with the group they start throwing out things that bend the truth, just a bit. Remember all great lies have a degree of truth in them. Finally, they start to expend serious ammo on their goal - after all they are trusted members of the group and have creds.

Personally, I don't doubt that a few managers can beat the averages consistently enough to make a meaningful difference in an investor's net worth. My question is "How do I know today who they will be five to ten years from now?' My experience has taught me that today's winners are not necessarily tomorrow's. I remember investing in, IIRC, the Nicholas Fund and the Acorn Fund, only to find that they reverted to the mean in a few years. Michael Price did a great job with Mutual Shares, but then he sold the company and went on to other things.

Heavyweights where, nothing but a bunch lightweight here. LOL

 

[OldShooter]

Heavyweights where, nothing but a bunch lightweight here. LOL

I don't understand this. The grammar is kind of fractured. Is this some kind of ad hominem attack?

 

[nellieb]

dodge and cox

Anyone own any dodge and cox funds?

 

[REWahoo]

Anyone own any dodge and cox funds?

I once owned their balanced fund but got burned a bit by it during the 2008/9 decline. Turns out they were chasing performance by over weighting financials, and it came back to bite them (me) by losing 47% of its value, really lousy performance for a balanced fund. I found I wasn't comfortable with the volatility of a balanced fund that could vary its equity percentage between 25% and 75%. Sold DODBX and bought Wellesley. Hope to continue to live happily ever after.

 

[NW-Bound]

I have Dodge and Cox Balanced (DODBX) and Dodge and Cox International (DODFX). I first put some money in there in the early 2000s, with the intention of adding to it later but got sidetracked and never did.

I saw DODBX getting creamed with its financial sector overweight in 2008, but with only a percent or two in it, I left it alone. Seems to recover and doing OK now. It is now neck-to-neck with Wellington, but Wellington has less volatility.

 

[NW-Bound]

While we talk about Dodge and Cox Balanced Fund, I remember this story.

At the time of that crash, I was busy watching many stocks that I owned, which had nothing to do with the financial sectors yet getting hammered. As mentioned in the earlier post, I did not pay much attention to my shares of DODBX, as I only had 1 or 2% in it.

Then, I happened to read a transcript of an interview or talk that Bogle gave. Somebody asked him about the poor performance of DODBX. Bogle said that DODBX was a fine MF, and that every MF could have a bad year. Leave it alone, and it would recover. Whoa! What's wrong with DODBX? Of course it got my attention.

I was impressed that Bogle did not say "See, I told you they should have been indexing". I was not a Bogle follower though I know about him and his work, but what he said made me respect him more.

From that transcript, I realized that not all was well with DODBX, and I then checked into the cause of its problem. But I started to pay more attention to what Bogle says even though I am not an ardent follower.