All Clowns Must Be Destroyed Message Board

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Pastimes : All Clowns Must Be Destroyed

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To: BGR who wrote (30210)	4/28/2000 7:17:00 PM
From: patron_anejo_por_favor	Read Replies (1) of 42523

My point is that achieving risk adjusted performance that exceeds the S&P 500 is not as hard as you make it out to be. The fact that Stansky and Vinik have not trashed Lynch's performance lead supports that fact (i.e, indicates that it was NOT necessarily a fluke caused by the savant-like properties of a single exceptional manager). I agree with part of your point: that many (if not most) mutual fund and institutional money managers are clowns. Now more than ever in fact, with all the concentration and risk taking that many neophyte fund managers now employ. However, I think with proper attention to the risk properties and selection characteristics of a given manager, yes, you can find some who have and will continue to beat the S&P (which is after all a product of "portfolio selection" by "managers", the S&P selection committee). I think indexing has a place in a diversified portfolio (especially that part that is not within a tax deferred account), but it is not the perfect investment choice for risk adjusted performance.

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