A Quote by Kelly Evans
Entire populations of market strategists, fund managers, and economists are employed to try and intuit for clients which securities to bet on for the best possible return each year - or quarter.
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When it comes to fund managers and market strategists, this year's hero usually turns into next year's zero.
The fund scandals shined the spotlight on the fact that mutual fund managers were putting their interests ahead of the fund shareholders who trusted them, which had much more substantial consequences in the form of excessive fees and the promotion - as the market moved into the stratosphere - of technology funds and new economy funds which were soon to collapse.
As value investors, our business is to buy bargains that financial market theory says do not exist. We've delivered great returns to our clients for a quarter century-a dollar invested at inception in our largest fund is now worth over 94 dollars, a 20% net compound return. We have achieved this not by incurring high risk as financial theory would suggest, but by deliberately avoiding or hedging the risks that we identified.
We don't understand the equity market well, and so we deploy funds in fixed-income securities, and like any other securities, investment in those securities also need to follow the mark-to-market accounting principle.
I think there are probably too many hedge fund managers in the world, as well as active fund managers. The hedge fund industry is very efficient. We see a lot of hedge funds open and a lot close. It's very binary. You either succeed or fail in the hedge fund world. If you succeed, the amount the managers make it beyond most people's wildest dreams of wealth.
Hedge fund managers charge so much more than mutual fund managers; alpha is even harder to come by. They end up selling a variety of things beyond mere outperformance.
I have often wondered how they manage to get return envelopes which miss, by one-quarter of an inch, fitting the blank you are supposed to return. They say, "Please fill out and return the enclosed envelope," and the enclosed envelope is always one-quarter of an inch too small.
Experience conclusively shows that index-fund buyers are likely to obtain results exceeding those of the typical fund manager, whose large advisory fees and substantial portfolio turnover tend to reduce investment yields. Many people will find the guarantee of playing the stock-market game at par every round a very attractive one. The index fund is a sensible, serviceable method for obtaining the market's rate of return with absolutely no effort and minimal expense.
To reduce risk it is necessary to avoid a portfolio whose securities are all highly correlated with each other. One hundred securities whose returns rise and fall in near unison afford little protection than the uncertain return of a single security.
Mutual fund managers are trapped in this rather deadly vicious circle: the more successful they are, the more money flows into their mutual fund. Then, it is more difficult for them to beat the market averages or even to match their own past performance.
The idea that a bell rings to signal when investors should get into or out of the stock market is simply not credible. After nearly fifty years in this business, I do not know of anybody who has done it successfully and consistently. I don't even know anybody who knows anybody who has done it successfully and consistently. Yet market timing appears to be increasingly embraced by mutual fund investors and the professional managers of fund portfolios alike.
The biggest secret in venture capital is that the best investment in a successful fund equals or outperforms the entire rest of the fund combined.
The index fund always gives you the market return.
If competition for Kaggle's top talent becomes fierce enough among banks, insurance companies, hedge funds - we hope the world's best data scientists will earn more than $50 million per year, just like the world's best hedge fund managers.
I charge my wealthy clients a lot and put 10 per cent in a fund which I use to pay the expenses of my poorer clients. When the government gangs up on the poor schnook in the street, someone has to stand up for him.
My career in academic research has not been involved with active management of securities. I've tried to understand risk-and-return relationships; also the pricing of derivative securities.
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