stock market was up today...

#12,501
#12,501
Ernest T. Vol said:
Fed has gone from saying no risk of inflation in Spring, to transitory inflation only all Summer, to now "speeding up the taper". They are driving down the road looking in the rear-veiw mirror.
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They always are. They make stuff up as they go along, and always have.

The greatest trick that institution has pulled is that they know what they are doing. It's an impossible job.
 
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#12,507
#12,507
Velo Vol said:
Some do. The problem is there are many that don't.
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Well of course they don’t. Long known fact that I have never once tried to refute.

“A majority of fund managers fail to beat their respective index consistently.”

Wow. Earth shattering. Don’t pick one of those guys.
 
#12,509
#12,509
Velo Vol said:
A lot of truly passive investors don't want to bother with the market ups and downs. And, in that case, why not just tell them to go with the tried and true?
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They are certainly entitled to, I’ve never said otherwise.

And there are certainly investment houses and individual managers that have consistently beaten the indexes over the last 5-10-20 year periods. That’s all. Shouldn’t be news to anyone.

All Lynch was saying. And he’s right.
 
#12,510
#12,510
85SugarVol said:
True

Legendary investor Peter Lynch breaks with Warren Buffett, warning passive investors they're losing out and backing the best fund managers to keep beating the market
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Which type of funds and are the underlying portfolios of the funds outperforming or the funds themselves in the case of ETFs or closed-end mutual funds?

Rock star fund managers of ETFs/CE mutual funds will draw investor demand and a self fulfilling premium for the fund due to the demand from the FOMO crowds. If they manage open mutual funds then they will quickly grow too large not be buying the same huge names as in the indexes.

Cathie Wood - when she adds shares of small and mid-sized names to ARK she publishes the lists, her cult followers bid up the obscure names, her funds profit, rinse, repeat. Her ETFs are now under $10 billion each on average. Her formula won’t work if she managing hundreds of billions or a couple trillion.
 
#12,511
#12,511
Thunder Good-Oil said:
Which type of funds and are the underlying portfolios of the funds outperforming or the funds themselves in the case of ETFs or closed-end mutual funds?

Rock star fund managers of ETFs/CE mutual funds will draw investor demand and a self fulfilling premium for the fund due to the demand from the FOMO crowds. If they manage open mutual funds then they will quickly grow too large not be buying the same huge names as in the indexes.

Cathie Wood - when she adds shares of small and mid-sized names to ARK she publishes the lists, her cult followers bid up the obscure names, her funds profit, rinse, repeat. Her ETFs are now under $10 billion each on average. Her formula won’t work if she managing hundreds of billions or a couple trillion.
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Traditional actively managed funds. You can find offerings in almost any space that consistently beat their index.

I don’t think anyone has followed Cathie Wood for a while now.
 
#12,512
#12,512
85SugarVol said:
Traditional actively managed funds. You can find offerings in almost any space that consistently beat their index.

I don’t think anyone has followed Cathie Wood for a while now.
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Open mutual funds or ETFs/CE funds is what I was asking. The latter are priced like stocks and will be bid up with demand. The former are priced at the underlying investments. Cathie Wood falls into the latter group. Her returns get skewed when the cult buys up the names she publishes which then drives up ARK Funds valuations.

Cathie Wood has been all over the establishment financial media this week. Bloomberg. CNBC. Yahoo Finance. FT. Forbes. CNN.
 
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#12,513
#12,513
Thunder Good-Oil said:
Open mutual funds or ETFs/CE funds is what I was asking. The latter are priced like stocks and will be bid up with demand. The former are priced at the underlying investments. Cathie Wood falls into the latter group. Her returns get skewed when the cult buys up the names she publishes which then drives up ARK Funds valuations.

Cathie Wood has been all over the establishment financial media this week. Bloomberg. CNBC. Yahoo Finance. FT. Forbes. CNN.
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Open. Traditional active funds.

She’s on a PR tour. Ark funds have been beat down.
 
#12,515
#12,515
Thunder Good-Oil said:
and ARK funds don’t match that description.

The financial media would not be giving her the free publicity if she didn’t have viewers following her.
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I’m not talking about the Ark Funds or Cathie Wood. You keep bringing those ETF’s up.

I am talking about traditional, open end, actively managed mutual funds. A prime example would be the Magellan that Peter Lynch ran during his 29% annual return days.

I don’t know how else to say it. If you want to talk Cathie Wood and Ark, that’s a completely different conversation.
 
#12,516
#12,516
85SugarVol said:
I’m not talking about the Ark Funds or Cathie Wood. You keep bringing those ETF’s up.

I am talking about traditional, open end, actively managed mutual funds. A prime example would be the Magellan that Peter Lynch ran during his 29% annual return days.

I don’t know how else to say it. If you want to talk Cathie Wood and Ark, that’s a completely different conversation.
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ETFs and CE MFs can be actively managed as well. I pointed out that there are 2 types. You replied with “open traditional”. “Traditional” isn’t a definition of a fund.

Magellan was open, closed, reopened. Index funds were a fraction of their size when he was getting 30% returns on average.

The linked article quotes Peter Lynch. He owns a big piece of Fidelity. He makes more money when the AUM of their actively managed funds cannibalize their low fee index funds.
 
#12,517
#12,517
Actively managed funds can pretty much mirror the index funds. They are more profitable as royalties don’t have to be paid to publishers of the indexes plus the funds charge investors a higher fee.

Baron Funds top investments are the the usual names. AAPL. MSFT. GOOG. FB. NVDA.
 
#12,518
#12,518
Here's a list of funds that have beaten the S&P 500 index fund over the last 7 years, a total of 24 and as they say, "past performance is not indicative of future gains".
Nonetheless, the data shows that while the market is tricky for active funds to navigate, some do consistently deliver. Of course, three in four active funds did not pass this test, so for the sector as a whole there are greater odds of investment success by simply selecting an index fund or ETF.
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US funds that have consistently beaten the S&P 500
 
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#12,519
#12,519
Thunder Good-Oil said:
ETFs and CE MFs can be actively managed as well. I pointed out that there are 2 types. You replied with “open traditional”. “Traditional” isn’t a definition of a fund.

Magellan was open, closed, reopened. Index funds were a fraction of their size when he was getting 30% returns on average.

The linked article quotes Peter Lynch. He owns a big piece of Fidelity. He makes more money when the AUM of their actively managed funds cannibalize their low fee index funds.
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Of course those can be actively managed as well. I didn’t muddy the waters by bringing them in.

I believe you knew exactly what I meant when I said “a traditional, open ended fund” - a Mutual Fund in its traditional sense.

The Magellan and Peter Lynch were just an example. A fitting one since he was referenced in the article.

There are modern managers consistently beating their Index as well. Not hard to find.
 
#12,520
#12,520
85SugarVol said:
Of course those can be actively managed as well. I didn’t muddy the waters by bringing them in.

I believe you knew exactly what I meant when I said “a traditional, open ended fund” - a Mutual Fund in its traditional sense.

The Magellan and Peter Lynch were just an example. A fitting one since he was referenced in the article.

There are modern managers consistently beating their Index as well. Not hard to find.
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Entry points and the time frame used to measure returns come into play. It would be easy to beat index averages simply by adding a handful of out performing companies along with investing in an index fund. Also investors can use leverage to beat the indexes in bull markets and selling covered calls in bear markets.
 
#12,521
#12,521
Thunder Good-Oil said:
Entry points and the time frame used to measure returns come into play. It would be easy to beat index averages simply by adding a handful of out performing companies along with investing in an index fund. Also investors can use leverage to beat the indexes in bull markets and selling covered calls in bear markets.
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Time frames discussed were 5-10-20 years.

Leverage and derivatives was not the kind of active management Lynch was referencing.
 
#12,522
#12,522
85SugarVol said:
Time frames discussed were 5-10-20 years.

Leverage and derivatives was not the kind of active management Lynch was referencing.
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I’m talking about the pricing on 12/31, 3/31, 6/30, and 9/30.

I’m also talking about individuals using leverage and covered calls on top of a core position in an index fund. Not that hard to get another 200 or 300 basis points.
 
#12,523
#12,523
Thunder Good-Oil said:
I’m talking about the pricing on 12/31, 3/31, 6/30, and 9/30.

I’m also talking about individuals using leverage and covered calls on top of a core position in an index fund. Not that hard to get another 200 or 300 basis points.
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Of course individuals can use leverage to juice returns. To each their own.

But that’s not what Peter Lynch was talking about.
 
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