stock market was up today...

[Thunder Good-Oil]

Are you arguing his point? That you can find traditional, open ended, actively managed mutual funds that consistently beat their index?

Consistently? It’s a lot like picking the best individual stocks. Past performance isn’t a guarantee of future results. A lot of the actively managed fund managers are personalities that are being marketed by the fund families. Once the successful active funds reach a certain size the performance will become more and more difficult.

I’d like to see a list of these great managers rather than just a link. Baron Funds claim excellent returns. Like 16 or 17 besting the indexes. Cathie Wood has been the recent rock star… but she’s ridden Tesla’s coattails, crypto names, and her notoriety drives up the prices of the obscure stock names that she adds to her recipe.

I’m not really a fan of the “traditional” mutual funds unless they are in retirement accounts. Those Q4 capital gains distributions can be a problem. Plus, when actively managed is part of the mix, it becomes difficult to allocate other investments not knowing where those active managers might take their funds.

 

[85SugarVol]

Consistently? It’s a lot like picking the best individual stocks. Past performance isn’t a guarantee of future results. A lot of the actively managed fund managers are personalities that are being marketed by the fund families. Once the successful active funds reach a certain size the performance will become more and more difficult.

I’d like to see a list of these great managers rather than just a link. Baron Funds claim excellent returns. Like 16 or 17 besting the indexes. Cathie Wood has been the recent rock star… but she’s ridden Tesla’s coattails, crypto names, and her notoriety drives up the prices of the obscure stock names that she adds to her recipe.

I’m not really a fan of the “traditional” mutual funds unless they are in retirement accounts. Those Q4 capital gains distributions can be a problem. Plus, when actively managed is part of the mix, it becomes difficult to allocate other investments not knowing where those active managers might take their funds.

Yes, consistently. As in over the last 5-10-20 year periods.

T. Rowe has multiple offerings that consistently beat their index. They’re easy to find.
I get it, you don’t like them.

 

[Thunder Good-Oil]

Yes, consistently. As in over the last 5-10-20 year periods.

T. Rowe has multiple offerings that consistently beat their index. They’re easy to find.
I get it, you don’t like them.

I don’t like “traditional” mutual funds.

I’m not a fan of actively managed funds for investors that want to understand their investment allocation.

I’m not convinced that those claiming to consistently beat the averages are being honest. Taking on more risk in bull markets will easily out perform index averages. Most of the last 20 years have been up years and the one or two that weren’t quickly recovered. Peter Lynch isn’t an unbiased voice. He profits more as Fidelity customers move their investments from passive style funds to the higher fee actively managed funds. Cathie Wood is an active manager that has luckily been heavily invested in Tesla and crypto at a good point in time. She has leveraged her notoriety into meme-like run ups in valuations of her obscure, small/smaller mid cap names.

Actively managed pretty much equates to putting on more risk.

 

[85SugarVol]

I don’t like “traditional” mutual funds.

I’m not a fan of actively managed funds for investors that want to understand their investment allocation.

I’m not convinced that those claiming to consistently beat the averages are being honest. Taking on more risk in bull markets will easily out perform index averages. Most of the last 20 years have been up years and the one or two that weren’t quickly recovered. Peter Lynch isn’t an unbiased voice. He profits more as Fidelity customers move their investments from passive style funds to the higher fee actively managed funds. Cathie Wood is an active manager that has luckily been heavily invested in Tesla and crypto at a good point in time. She has leveraged her notoriety into meme-like run ups in valuations of her obscure, small/smaller mid cap names.

Actively managed pretty much equates to putting on more risk.

Of course Peter Lynch profits when Fidelity profits. Didn’t figure you to be one to have a problem with that.

Cathie Wood has been getting dragged. If you insist on continuing to reference her on your own, you might want to look into it.

There are myriad ratios that have been around for decades that measure how much risk a “traditional” mutual fund is taking on relative to its Index.

 

[Thunder Good-Oil]

Of course Peter Lynch profits when Fidelity profits. Didn’t figure you to be one to have a problem with that.

Cathie Wood has been getting dragged. If you insist on continuing to reference her on your own, you might want to look into it.

There are myriad ratios that have been around for decades that measure how much risk a “traditional” mutual fund is taking on relative to its Index.

I don’t have a problem with Peter Lynch. I said that he’s not an unbiased advocate for actively managed funds. The more of Fidelity’s AUMs that are under the actively managed umbrella as opposed to the passive index funds, the more he will profit as a Fidelity shareholder.

I’m aware of what Wood’s ARK funds have been doing.

Actively managed funds can change their investment philosophy at any time. The ratios measure their past but don’t necessarily provide an accurate picture of the funds’ current and future investment profiles.

 

[85SugarVol]

Actively managed funds can change their investment philosophy at any time. The ratios measure their past but don’t necessarily provide an accurate picture of the funds’ current and future investment profiles.

And? You believe they do? You’ve already pointed out how difficult it is to maneuver some of these monster AUM funds.

 

[Thunder Good-Oil]

And? You believe they do? You’ve already pointed out how difficult it is to maneuver some of these monster AUM funds.

And investors don’t know what they are buying into. Neither do the advisors.

 

[85SugarVol]

And investors don’t know what they are buying into. Neither do the advisors.

You doubt the veracity of the reported portfolio holdings?

 

[Thunder Good-Oil]

You doubt the veracity of the reported portfolio holdings?

Those are past holdings being reported. At least Wood discloses daily. But it’s not motivated by transparency. She wants her meme-like holdings to pop.

 

[85SugarVol]

Those are past holdings being reported. At least Wood discloses daily. But it’s not motivated by transparency. She wants her meme-like holdings to pop.

They are reported quarterly. You know that though.

 

[Thunder Good-Oil]

They are reported quarterly. You know that though.

Reporting past holdings when the managers can change the entire portfolio at any time doesn’t help advisors or investors plan. Plus the harvested capital gains are a crap shoot that wreck havoc with tax planning.

 

[85SugarVol]

Reporting past holdings when the managers can change the entire portfolio at any time doesn’t help advisors or investors plan. Plus the harvested capital gains are a crap shoot that wreck havoc with tax planning.

So you’re saying active managers routinely “change the entire portfolio at any time” to somehow throw off the historical ratios? Seems a bit outlandish to me, but you’re certainly entitled.

 

[85SugarVol]

Here. You’ll like this, he doesn’t actually refute Lynch either.

Column: Legendary investment guru Peter Lynch says the move to index funds is a 'mistake.' He's wrong

Just offers up the same tired trope -

That's because the debate has long since been resolved by reality: Active investment managers consistently fail to match or exceed the benchmark indices of their funds. Passively managed index funds, by definition, always hit their benchmarks.

Even admits he’s right here, then proceeds with the nonsense -

It's true that his three exemplars have done well, but many of Fidelity's actively managed funds have not met their benchmarks.

 

[Thunder Good-Oil]

So you’re saying active managers routinely “change the entire portfolio at any time” to somehow throw off the historical ratios? Seems a bit outlandish to me, but you’re certainly entitled.

I’m saying that the fund style is a wild card. And not being tax efficient can negate the extra 2-3% extra returns that they might beat the index averages by.

 

[Velo Vol]

Seems like a tricky market to read in the short-term. A few stocks are mostly responsible for preventing a correction in the averages. A more aggressive Fed could alter growth valuations.

 

[85SugarVol]

Seems like a tricky market to read in the short-term. A few stocks are mostly responsible for preventing a correction in the averages. A more aggressive Fed could alter growth valuations.

They are going to have to deal with this runaway, “transitory”, inflation at some point.

Growth will get hammered. Again.

 

[Velo Vol]

Growth will get hammered. Again.

Even if it sticks with the expected course: a scheduled taper and two or three hikes next year?

It seems like we're going to need something more for a dramatic selloff on the top performers.

 

[Velo Vol]

I still don't get the EV stocks.

 

[Thunder Good-Oil]

I still don't get the EV stocks.

Liberals think that they are saving the world and are throwing a **** ton of stimulus at their fantasy. Stocks hit ahead of reality. What about spent battery disposal, Lithium mining, and the electrical grid that isn’t ready to handle a surge in demand? I think that eventually the GMs, Fords, and Toyotas along with Tesla own the space. Exxon, BP, Chevron, and Shell already own the real estate to sell electricity from.

 

[Velo Vol]

I think that eventually the GMs, Fords, and Toyotas along with Tesla own the space.

That's one of the mysteries: why the "new" EV manufacturers have been priced to dominate the future over the existing companies?

 

[Thunder Good-Oil]

That's one of the mysteries: why the "new" EV manufacturers have been priced to dominate the future over the existing companies?

Like the meme stocks. Lots of demand from naive, uninformed “investors”. It happens over and over. Tulip bulbs. 19th/early 20th century gold stocks. Oil companies. Computers. Long distance providers. Dot coms. Cryptos. EVs. AVs. COVID drugs. Enron. Global Crossing. MCI-WorldCom. JDS-Uniphase.

 

[Velo Vol]

Like the meme stocks. Lots of demand from naive, uninformed “investors”. It happens over and over. Tulip bulbs. 19th/early 20th century gold stocks. Oil companies. Computers. Long distance providers. Dot coms. Cryptos. EVs. AVs. COVID drugs. Enron. Global Crossing. MCI-WorldCom. JDS-Uniphase.

Yes, the stock market does stock market things, but a lot of "smart" money had to be in the mix for TSLA to hit $1 trillion.

I know you've not been pushing the stock, so I'm not directing the comment at you, but you have to make several assumptions in order for that company or its brethren to have a dominant market share ten years from now.

 

[Thunder Good-Oil]

Yes, the stock market does stock market things, but a lot of "smart" money had to be in the mix for TSLA to hit $1 trillion.

I know you've not been pushing the stock, so I'm not directing the comment at you, but you have to make several assumptions in order for that company or its brethren to have a dominant market share ten years from now.

Tesla is different from the other EVs. If they were just a car company, they’d be way over valued. But they are a power company that makes cars. It won’t surprise me if they end up partnering or selling their vehicle manufacturing to one or more of the GMs, Fords, Toyotas, Mercedes, VWs, Fiats, etc and focus on batteries, power systems, connecting residential micro power generation and storage systems, and other energy integration businesses. There is a lot of risk though being so heavily dependent on Elon’s brain.

 

[distrovol]

Tesla is different from the other EVs. If they were just a car company, they’d be way over valued. But they are a power company that makes cars. It won’t surprise me if they end up partnering or selling their vehicle manufacturing to one or more of the GMs, Fords, Toyotas, Mercedes, VWs, Fiats, etc and focus on batteries, power systems, connecting residential micro power generation and storage systems, and other energy integration businesses. There is a lot of risk though being so heavily dependent on Elon’s brain.

I’ve read part of their valuation stems from all the information collected (and stored) from those that buy and drive their cars.

 

[Thunder Good-Oil]

I’ve read part of their valuation stems from all the information collected (and stored) from those that buy and drive their cars.

That makes sense. Apple gets much of their value from their customer base. Buyers of iPods and iPads became buyers of iPhones, iMacs, watches, iCloud services, and so on and vice versa. I would imagine that happy Tesla automobile customers will be buyers of home power units and related products. Tesla’s customer service is outstanding. A home generator is on my wish list. It is brutal when the power goes out and with all of the devices needed for working at home generators are becoming as necessary as HVAC, refrigeration, washers, dryers, stoves/ovens, and so on.