Bob Brinker: Market Savant & Radio Host Message Board

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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host

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To: Justa Werkenstiff who wrote (388)	4/30/1997 4:17:00 PM
From: Investor2	of 42834

RE: "There have been times when many more funds did beat the indexes. .... Currently, things don't look to good for the fund managers. The great debate is over whether this will continue into the future and/ or to what degree." I agree that the continued outperformance of managed funds by index funds may not last forever, and has not always been true in the past. Recently, the S&P 500 index funds have beated almost all managed funds. I believe that this is due to the blind and wild rush to purchase big cap stocks by individual investors as well as professionals. I agree with Bob when he says that the current happenings are remeniscent of the 1970s' Nifty Fifty. IMHO, the large caps will not continue to significantly outperform the small caps, so the degree of S&P Index fund outperformance of managed funds will drop. I do believe that, even during a small cap rally, the S&P Index will probably outperform 50% or more of the managed funds. Also, IMHO, the high-PE large cap stocks will take quite a hit when the next Bear shows up, since they have run up to such high PE multiples. Best wishes, I2

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