Active Management Quotes

99% of fund managers demonstrate no evidence of skill whatsoever.

Still, I figure we shouldn't' discourage fans of actively managed funds. With all their buying and selling, active investors ensure the market is reasonably efficient. That makes it possible for the rest of us to do the sensible thing, which is to index. Want to join me in this parasitic behavior? To build a well-diversified portfolio, you might stash 70 percent of your stock portfolio into a Wilshire 5000-index fund and the remaining 30 percent in an international-index fund.

Most investors would be better off in an index fund.

While it is probably a poor idea to own actively managed funds in general, it is truly a terrible idea to own them in taxable accounts... taxes are a drag on performance of up to 4 percentage points each year... many index funds allow your capital gains to grow largely undisturbed until you sell... For the taxable investor, indexing means never having to say you're sorry.

Quit being 'busy' and start actively owning and operating your company, and you'll be able to understand where the money is coming from and how to make more of it.

[With] closet indexing....you're paying a manager a fortune and he has 85% of his assets invested parallel to the indexes. If you have such a system, you're being played for a sucker.

There has to be active, hands-on management in concert with the manager to lead the organization and make sure that the standards that we set for the organization as a whole are being lived up to.

With actively managed funds, people have big behavior problems. With funds that have done well, they put their money in, and when it has done bad, they want to take it out.

... skepticism about past returns is crucial. The truth is, much as you may wish you could know which funds will be hot, you can't - and neither can the legions of advisers and publications that claim they can. That's why building a portfolio around index funds isn't really settling for average. It's just refusing to believe in magic.

By periodically investing in an index fund, the know-nothing investors can actually outperform most investment professionals.

The deeper one delves, the worse things look for actively managed funds.

Indexing is a successful approach to investing not because it's simple, but because it has performed so much better than the average active manager (the opposite of indexing), and the simplicity is just an added bonus.

As a result of overdiversification, their (active managers) returns get watered down. Diversification covers up ignorance. Active managers haven't done enough research into any of their companies. If managers have 200 positions, do you think they know what's going on at any one of those companies at this moment?

Will customers keep supporting the enormous overhead required to sustain ineffectual, unproductive stock picking across an array of thousands of individual funds devoted to every investing 'style' and economic sector or regional subgroup that some marketing idiot can dream up? Not likely. A brutal shakeout is coming and one of its revelations will be that stock picking is a grossly overrated piece of the puzzle, that cost control is what distinguishes a competitive firm from an uncompetitive one.

Index investing outperforms active management year after year.

Nobody wants to be passive; indexing is not passive - much more goes into indexing than watching a stock become the next buggy whip.

There is no substitute in the beginning of any administration for a very active political personnel operation.

The debate can be put in the form of the question: Resolved, that the best of money managers cannot be demonstrated to be able to deliver the goods of superior portfolio-selection performance. Any jury that reviews the evidence, and there is a great deal of relevant evidence, must at least come out with the Scottish verdict: Superior investment performance is unproved.

Hedge funds are not noted for their long-term thinking - for them, a quarter is an eternity.

Trust is maintained when values and beliefs are actively managed. If companies do not actively work to keep clarity, discipline and consistency in balance, then trust starts to break down.

I think it would be more beneficial to protection of species if we could focus our efforts rather than paint a broad-brush area that is so enormous that active management is very, very difficult.

I have five major corporations, and I operate them. How could I be retired?

Active management leads to lots of poor investor behavior. It sends people chasing after whoever has the hot hand at the moment.

Active investment is a zero-sum game. Passive managers don't play the game. They buy something resembling the market as a whole, or some segment of the market, and they don't respond to the actions of active managers.

Everybody has a different strategy, but everybody agrees that active management does not beat the market.