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Passing Shots

The Fifth Set Blog

Topics: Active Management, Active vs Passive, Asset Allocation, Efficient Market Hypothesis, Evidence-Based Investing, Fiduciary, Index, Index Investing, Long-term investing, Passive, Portfolio Management, Random Walk, Uncategorized

The Guru and The Investor: Act 2 – The Evidence-Based Advisor Strikes Back

Act Two The Setting Following his interview of a hedge-fund manager to see if he should manage his retirement assets, the Investor turns his search to a different type of advisor, for a philosophy based on something called ‘evidence-based investing’.  This seemingly outlandish idea is  …read more »

The Evidence is in (Again). Indexing Beats Active Management.

S&P Dow Jones Indices released their latest SPIVA (S&P Index vs Active) scorecard for the period ending December 2018.  If you’re a fan of active fund managers, the news is not good. Following are some quick data points and a video from NBR with Bob  …read more »

The Guru and The Investor: A Hedge Fund Story

Act One The Setting Guru appears on CNBC to explain what will happen with interest rates, Brexit, and the economy over the next two years.  Investor sees Guru on TV and assumes that CNBC would only have people on their shows who knew what they  …read more »

A Brief History of the Index Fund

On the 40th anniversary[1] of the launch of the First Index Investment Trust (now the Vanguard 500 Index Fund), it is interesting to note how the original premise of index funds has held up over time.  The premise that a low-cost, unmanaged fund, simply composed  …read more »

Investor (Mis)behavior

A well-written recent New York Times article seeks to elucidate the causes of investor (mis)behavior through recent research into behavioral finance.  In the article, the author, Gary Belsky, details five cognitive biases that are hard-wired into human brains.  These biases form the basis for investor  …read more »

A World Without Stock Picking Skill – Revisited

In a follow up to an S&P Dow Jones Indices Study from the summer 2014 “Does Past Performance Matter? The Persistence Scorecard”, a New York Times article takes a look at the performance of the two “winning” mutual funds from the 2014 study. Winning, in  …read more »

The Key to Successful Investing

Responding to an email, I came up with this and thought it was worth sharing… The fundamental problem with bond guys is they are programmed to focus on what could go wrong.  Equity guys are programmed to ignore everything that could go wrong.  Strategic asset  …read more »

CalPERS Kicks Their Hedge Fund Investments to the Curb

Last week, CalPERS, the California Public Employees’ Retirement System, which manages approximately $300 billion on behalf of 1.6 million public school and other local and state employees, announced that they “will eliminate its hedge fund program, known internally as the Absolute Return Strategies (ARS) program,  …read more »

What’s better than real world stock picking performance? A world with no investment skill….

No, the title doesn’t have a typo. The results of a recent S&P Dow Jones Indices study profiled in a New York Times article found that only 2 out of 2,862 (or 0.07%) broad domestic stock funds performed in the top quartile of funds over  …read more »

Vanguard Founder John Bogle’s Vision for the Future of Investing

A recent opinion piece in the Wall Street Journal written by the Vanguard founder offers his views on the future of investing with a focus on the following themes: The disintermediation of the financial system. An increased acceptance that excessive trading reduces returns. A continuation  …read more »