Hi Guys,
The Meketa Investment Group (MIG) does first-class internal financial research. That’s not exactly unique but allowing individuals free access to this fine work sets them somewhat apart. Thank you MIG for entrée to your many informative White Papers.
Here is the generic Link to the MIG website immediately followed by a direct Link to their White Paper listing:
http://www.meketagroup.com/http://www.meketagroup.com/investment-research-white-papers.aspIn this instance, I direct your attention to their most recent addition titled “ Active Manager Performance: Alpha and Persistence”. MIG only releases a few of these reports annually; it reflects the care that is exercised in their preparation.
Please examine this active fund manager update. The MIG team made a special effort to identify a complete listing including defunct entities, to cull that expanded database, to properly classify funds into their real categories, and to meticulously evaluate their Alpha/Persistence performance metrics.
The MIG team made a valiant effort to establish Alpha winners and the persistency characteristics of these rare winners for 6 fund classifications: core bonds, high yield bonds, domestic large cap equities, domestic small cap equities, foreign large cap equities, and emerging market stocks.
The findings are not shocking. I’ll summarize the most pertinent findings without further comment. In general, results are presented as each groups Median (not average) performance against a relevant benchmark. Here are MIG’s primary conclusions.
Even before fees, the core bond and the Foreign Large Cap group’s Median performance is negative relative to their appropriate benchmarks.
After fees are subtracted, the “median level of fees negated any (stock picking) advantage” for all 6 categories.
In an expansion of the US large and small cap groups into growth and value classes, small cap value equity managers made a statistically significant positive stock picking contribution.
The data were examined as a function of time. In some categories, active management made a positive difference during market meltdown plunges.
More recently, active managers have found it more challenging to outdistance benchmarks. The competition is more evenly matched and active manager investment edges are disappearing
Performance persistence among active fund managers is nonexistent. MIG concluded that “managers who outperformed over a 5-year period were no more likely to outperform over the next 5-year period than any other manager selected at random”.
The overarching final MIG conclusion is that “identifying managers that will perform ex-ante by relying on past performance alone will prove to be a fool’s errand”.
These findings need not be the death knell for active fund management. The inclusion of the word “alone” in the final conclusion is a critical qualifier. Other factors do enter into the fund manager selection equation. Keeping costs down will surely increase the outperformance odds. Situational awareness can also improve the odds of a successful selection process.
The referenced article has a pile of useful historical data and charts (especially in the appendix section). There are many lessons to be learned from this work Once again, please read the White Paper.
Best Regards and Happy Easter.
Comments
I don't mean silly things like "don't buy the hottest fund last year" because you don't need such studies to see the problem with that.
Anybody? Serious question.
?:
1) Look to the longer terms to see what if anything exists in reality.
I have just been comparing Tillinghast (FLPSX) over the last 12.9y *by year bundle* --- smidgens of plus, but real, yet waning since 08, fewer or no more pluses. Ditto, quite, for Gabelli GABSX vs VB, 10y and in.
2) So go ahead and go with indexes only? Or stick with those two (:)).
3) Be prepared for shorter-term superiority to wane and plan accordingly, whatever that means.
Sounds flip, I realize.
Meantime, what if RGHVX really has found secret sauce, as it amazingly appears? What then for its future?
iijournals.com/doi/abs/10.3905/joi.2013.22.2.055#sthash.CZYMcp5y.q6D2AXaq.dpbs And just for @cman (as long as he's willing to pay for the article ;)): I certainly appreciate MJG's posts for their value added, and I have thoughts on why indices are outperforming recently and what a proper "long period of time is", but at this point I feel like there is little point in this argument, when the research itself is contradictory and every side just claims "Truth."
Far better to return to process, imo.
But, to let their shareholders know that MIG was worthy of whatever fees it was charging.
Which is probably a truism across the much of the industry, for better or worse.
Thank you so very much for alerting me to Radford University Professor Abhay Kaushik’s work. I was completely unaware of it.
Since Kaushik’s results appear to contradict others in the active-passive fund management debate, I am excited and anxious to examine his study. Unfortunately, the Link you provided does not permit access to his full report; it merely yields an abstract of his paper. I still have not seen his complete report.
However, a quick Internet search uncovered a few reviews of his effort. I dislike these secondary sources and greatly prefer the primary report which still eludes me. However, perfect knowledge is rarely accessible in the investment world, so I’ve made a temporary assessment with imperfect information. Nothing new to investors in this regard.
I basically examined two secondary sources on this matter: BAM Alliance’s Larry Swedroe and Morningstar’s John Rekenthaler. Here are the Links to their reviews:
http://www.cbsnews.com/news/dont-believe-everything-you-read-this-post-excluded/
http://news.morningstar.com/articlenet/article.aspx?id=608086
Notwithstanding my reservations, here are my present thoughts on Professor Kaushik’s research and how it integrates into the impressive body of earlier works.
At first glance, the referenced work might appear to be an anomaly since, on the surface, it seems to depart from a bevy of academic and industry studies. That is not necessarily so upon slightly deeper thinking.
Much depends upon the design of the experiment, its timeframe, and the selected benchmarks. Also the inclusion or not of fund survivorship bias in the study is unclear. Unfortunately, these are unknowns to me at this juncture and cloud a final quality judgment. Not all academic and industry empirical studies are of equal quality or scope.
Also, it is important to recognize the overarching conclusion of all the work in this field. There is no fundamental reason why either active or passive fund management is superior for all circumstances, An Iron Law on this matter does NOT exist. Most active/passive studies demonstrate that superior performance is achieved by a passive discipline, but it is not a universal truism. Much depends upon the meticulousness of the screening process and the timeframes considered.
When the Meketa group did its work, they concluded that passive fund management outdistanced active elements in both the Large and Small Cap equity arenas. However, when they parsed these categories into value and growth units, Meketa discovered that Small Cap Value active fund managers did generate positive Alpha. Results do depend on the fineness of the category structuring.
Additionally, study outcomes depend upon timeframe. The Meketa studies are longitudinally (time dependent) sensitive. MIG concluded that some active management categories produced positive Alpha during market meltdown years. Situational awareness is needed when interpreting all research findings.
In MIG’s world, the developed foreign markets were modeled as a single entity; apparently in Kaushik’s world, that same category was subdivided into 13 distinct groupings. Of course, each of these separate units was measured against specific benchmarks. It is not surprising that with this finer structure, some generated positive Alpha winners and some did not. The Kaushik abstract suggests total victory; the actual results tell a more complex ending.
The referenced abstract summary overstates the universality of its findings. Within its 13 sub-groups, some passive units outperformed the actively managed funds. The abstract was not sufficiently nuanced to acknowledge that detail.
How the fund survivorship bias is handled in any serious study is a major issue. Note the extreme care that the MIG team exercised when assembling their database. The first few pages of their report emphasize and document the potential impact that fund survivorship bias has on any final findings. It is not clear how Kaushik addressed this likely high impact parameter when organizing his research.
The relative gaps between active and passive fund management is a temporal thing; it is dynamic. The longitudinal charts that are an Appendix in the MIG report documents the performance gaps time-sensitive nature. As information becomes more widely accessible, apparently active management positive Alpha becomes more challenged.
The referenced work is surely controversial. Although I believe there is no Iron Law that dictates active versus passive performance outcomes, I do subscribe to the market’s regression-to-the-mean rule that seems to enforce a negative feedback loop that limits market distortions. Even the referenced work finds that, in some instances, weaker earlier fund actors outperformed their previously superior counterparties at a later time. Persistency is a hard nut in the marketplace.
I love these types of controversies. They inspire more careful research. That’s a good thing. A huge majority of the current findings fall in favor of passive fund management, but not always and not under certain circumstances. Overall. it is a conditional finding.
Before I became acquainted with this recent research, I was strongly influenced by the S&P SPIVA and persistency scorecards. They too demonstrated that a universal law simply doesn’t apply, but the odds favor the passive management approach. Exceptions exist in certain categories and under certain market conditions.
The bulk of research in this arena concludes that under most conditions, and for many investment categories, actively managed funds underperform competitive passive products. I find this assemblage of studies persuasive. I put more trust in these composite findings, especially since most of the contradictory evidence can be explained by details in the applied methodology.
As an acknowledgement to these numerous studies, I concluded that my portfolio needs an adjustment. Its present allocation is roughly a 50/50 split between actively and passively managed funds; I plan to settle on a 20/80 mix that is heavy in less costly passive products. I appreciate and honor the fact that, under certain circumstances, the active products can earn their higher cost drag. The Kaushik study has not caused me to revise my plan.
Sorry for my incomplete and imperfect reply. I simply do not have the primary report for a more comprehensive review. Incomplete knowledge is one universal constant when investing.
I hope this is helpful. Once again, thanks for your post.
Best Wishes.
Can you confirm though, I had thought the SPIVA data showed active SCV did not perform as well as people had assumed? If that's the case, again there is contradictory data. Methodology would be the only explanation.
Happy Easter/Passover/Weekend.
I appreciate your extra effort to secure a copy of Professor Kaushik’s report.
I suspect you and I are in substantial agreement that study findings are always tightly coupled to its methodology. Details just don’t simply matter, they matter greatly, and can reverse conclusions. In reviewing all research work, one conundrum is to identify which studies are of sufficiently high quality to accurately reflect the real world marketplace.
Even with our current shortfall with regard to some details of Kaushik’s procedures and data qualifying techniques, it is clear that his data preferences depart from those used by S&P and by the MIG organization.
For example, Kaushik used Morningstar as his primary data source for the small cap category; MIG used the Russell 1000 Value category benchmark. S&P typically accesses the University of Chicago CRSP data. By itself, the data source benchmark can invert conclusions. Here is a Link to a fine summary paper, “Lessons Learned from SPIVA”, generated by the Journal of Indexes that supports that observation:
http://www.etf.com/publications/journalofindexes/joi-articles/11140-lessons-learned-from-spiva.html
I direct your attention specifically to Lesson 6, Benchmark Choice Matters in the Active-Passive Debate. In this instance for Small Caps, the active managers outperformed its Russell 2000 benchmark by a smidgen for the time period considered, but active managers underperformed when measured against the S&P Small Cap 600 standard.
The referenced article has a wealth of actionable conclusions. Please access it.
The S&P summary review and the earlier mentioned MIG report both document that any active fund management excess returns is very time dependent, and erode as the timeframe expands. Managers enjoy momentary success, but that success crumbles to negative integrated outcomes relative to a benchmark. The referenced S&P paper also addresses this issue.
Persistent positive Alpha performance escapes all but a few active managers. The most devastating illustration of that overarching conclusion is provided as the Manager 5-year Persistence graph near the end of the MIG report. No trend-line, no pattern is discernable; it is a shotgun blast.
As stressed previously, the MIG release provides superb charting evidence of active managers volatile performance relative to their benchmarks. Indeed, active management can enhance outcomes, but they also can substantially detract. Subtraction is hard to take. This time dependent data is included as Appendix C in the MIG paper.
Since we are focusing on Small Cap results, please examine the chart titled “Russell 1000 Value”; it is located on page 20 of the report. It depicts aggregate SCV active manager outcomes measured against their benchmark. The data is displayed from 1979 to 2012. Note the random and spiky nature of the curve, and that it shows mostly negative relative performance years.
Also note that the SCV curve had a respectable positive bump in the 1999-2002 and the 2007-2009 timeframes. These were the glory years for active managers in that fund category. That glory has faded recently. The persistency handicap strikes once again. It’s a tough marketplace for active fund management.
I find the empirical evidence undeniable. Sure some active managers will outdistance their benchmark during short periods. But that advantage is ephemeral for almost all survivors.
In their 2012 SPIVA report, S&P concludes that “The annual league tables over the past 10 years demonstrate that short-term outcomes (such as one-year performance figures) of the index versus active debate are less consistent than longer-term outcomes.” Some things remain fairly stable. For completeness, here is the Link to that S&P document:
http://www.spindices.com/documents/spiva/spiva-us-year-end-2012.pdf
I never tell folks how to invest; that’s always their personal choice. However, I have no qualms about presenting them with the relevant statistics. It is their job to weigh the odds and the expected excess Alpha potential.
It is a daunting task to identify consistent fund manager winners. Perhaps dedicated and well informed mutual fund buyers can discover a glittering gem in the treacherous terrain. Good luck to them, and even to myself since I plan to do a little of that dubious exploration.
Best Wishes and Happy Easter.
But this isn't reality of how people pick funds, so the question to ask is whether any of the common criterion used to select funds change these odds and the performance measurement significantly.
Curiously, none of these people interested in accuracy and precision seem to go ahead and do this simple study. Or perhaps they have and don't like the results that don't fit the narrative. I don't know the reason but it is very odd. This might also explain the apparent contradiction between studies like this and the experience of people where they find most of their active funds handily outperforming. That explains your comment related to (1).
The counterargument to the above is to claim that even if you were able to select well, there is no persistency of performance and so futile leading to false conclusions such as your (3). Perhaps, one might think, the outperformance is only short term.
This does not follow from this study because of the artificial definition of persistence used. I will leave it as an exercise to the reader to show how an actively managed fund can handily beat the index over the long term and yet completely and consistently fail the persistence as defined in this study. Just taking your favorite fund and looking at its performance over the last 15 years in 5 year chunks will likely expose the problem with that definition.
The problem "junk science" studies like this persist is that people either don't have the critical thinking abilities or the patience to wade through details. Same reason why global warming skeptic "science" exists. All long prose is mistaken for correctness. For the choir, the confirmation bias doesn't allow them to subject such studies to the same level of critical analysis they would subject opposing studies (assuming they were capable of doing so).
As an exercise in critical thinking, I leave it to the reader to figure out the following flaws from the content in this study all of which are used to support religiously held views. These are the kinds of objections that would throw such papers out of any peer reviewed publication unless the peers were of similar ideological view.
1. Think of a reason this implication is incorrect. Hint: Total market?
2. The study includes an increasing number of funds with strategies for whom the performance criterion selection is irrelevant but skews the results for others. Can you think of which? Hint: Risk
3. The metric chosen compares the spread between performance of the worst of the best and the best of the worst.
Can you think of a measure available in that data that would make this spread a poor measure of that difference in skills to draw any conclusions? Hint: A intra-quartile measure
4. Can you think of a characteristic of the evolution of the fund industry where the use of the specific statistical measure of this study alone can explain the change in measured value than any reduction in opportunities? Hint: sample space and spread.
5. Given 4 above, can you spot the fallacy in the conclusion above? Hint: garbage in, garbage out.
6. Can you see what might happen to the trend line in that chart if the measuring period started from 1983 after the extreme overperformance of active managers in the couple of years before it? Can you think of the most obvious market condition that determines this measure and hence its efficacy in supporting market efficiency theories? Hint: Markets go up and they go down.
7. Same as 6 above. If the measuring period started from extreme underperformance, the results would be opposite.
8. Can you see why there will be a lack of correlation between this measure and the ability of the manager to outperform over that entire period? Hint: Look at the results of several of your funds over the last 10 years.
9. Can you spot the logical fallacy in the above statement regarding skills and market conditions?:Hint: dependent vs independent variables.
The point of this post is not to get into this debate from one side or the other. It is futile to do so with junk science and people who follow them because there are infinite ways to come up with logical fallacies and bad math. That is not even considering obfuscation via tangential arguments and appeal to emotion via prose. So, one lands up with an interminable debate knocking down fallacies only to face more. Life is too short for that.
What is more valuable in this nondeterministic activity called investing is practical and constructive advice, suggestions and experiences even if you don't necessarily agree with it without resorting to such junk science which is not worth the time (and not falling for confirmation bias on what you ignore). That should prevent a lot of the unpleasant exchanges and attacks whether direct or passive aggressive, authoritative or disguised in false humility.
I did find out I have free access to Mergent's data, though, so there is that.
This post is very difficult for me. It demands a delicate balanced set of thoughts that just might be beyond my competency reach.
I really like Cman’s submittals. In general I agree with almost 100% of the informational content although I don’t subscribe to his lack of documentation. My admiration ends when he interjects opinions and assertions that are not supported by any analysis or references.
I believe Cman really tries to educate us. Most of my postings are similarly directed. However, I also think that his posts tend to be pedantic; so do mine. As the old saw goes “It takes one to know one”.
I know why mine are so oriented. I spent the larger part of my working experience trying to win competitive contracts. If I wasn’t absolutely positive of my positions, I lost the competition. Perhaps Cman faced the same daunting challenge.
But the Cman and my educational pathways bifurcate at the documentation juncture. Typically, his postings are full of assertions and opinions that are devoid of supportive references, studies, or actual data. It is impossible to judge the merits of these assertions if you are not intimately familiar with the subject matter. I try to be meticulous in this area; hence I’m pedantic.
Mark Twain was on target when he said that “All generalizations are false, including this one “.
Given the lack of supportive documentation, a fair observer might conclude that Cman has fallen victim to the behavioral handicap of Overconfidence.
His judgments are far too rash. He uses pejorative descriptors such as “Junk Science” and “Garbage In, Garbage Out” without describing the junk science elements or the garbage inputs. Garbage Out is an individual reviewer judgment and depends on his personal assessment of the work quality.
During my college years, I was infrequently exposed to “the proof is assigned to the student” charge. I hated that assignment then, and I still dislike it today, especially in the investment world. My interpretation: That assignment either comes from a lazy educator or one that is not confident in his own knowledge or capabilities.
Acting as an educator, Cman often fairly presents both sides of an issue. That’s great, although there are limitations. President Harry Truman detested two-handed economists. He particularly despised the “On the one hand this” and “On the other hand that” type of advice. He pleaded for a one-handed economist who proffered a plain decision.
Denials notwithstanding, Cman and really all MFOers do have a pony in the active-passive race. Costs and results do matter to everyone. The debate is NOT a done deal. Claiming an early closure is equivalent to proclaiming a victory while the battle is still raging. That mostly works to an opponent’s advantage.
No standalone active-passive fund management study is conclusive by itself. The issue has far too many dimensions to permit a single, all-inclusive analysis to address and to resolve all the multitude of issues. Since no universal investment Ironclad laws exist, all studies are empirical in nature. All models are simplifications of reality; hopefully they still capture the governing elements of that reality. They are all imperfect.
Selecting bias free data and study timeframes will always influence findings. That’s specifically why numerous studies are needed and will continue to yield more realistic insights. The MIG study fits into that grouping.
I believe the MIG team did an honest job. I even think they were somewhat surprised by their findings. I’m nudged in that direction by the way they presented their findings. Their very first table shows that 4 of their 6 major fund categories delivered positive Alpha before costs. But nobody invests without costs.
In the same paragraph, MIG adjusts for costs and concludes that : “When comparing the median outperformance to the median fee for each asset class, the gross outperformance of the median manager has not justified the historical median fee. In other words, it seems that in the asset classes where active managers have added value, the median level of fees negated any advantage.”
Cman emphasized the “no cost” result to the detriment of the overarching negative Alpha after fees conclusion. That’s a little disingenuous, especially if you proclaim to have no ponies in the race.
Yet Cman elects to destroy the credibility of MIG’s efforts with ad hominem attack words like Junk Science and GIGO. All research is subject to errors ranging from incomplete data collection to poor practices to flawed data interpretations. But an honest attack requires full documentation, not merely shaky comprehensive assertions.
It is not at all clear why MIG would have incentives to prepare a defective report since their reputation is at risk. They do have much skin in the game.
The MIG team that Cman so firmly criticized has over 600 billion dollars under management, has been in the consulting business since 1978, and has recently been awarded a competitively bid contract from the California State Teachers’ Retirement System (CalSTRS). I’m sure they have been on the wrong side of some investment advice, but so has everyone else. As a minimum, MIG has demonstrated staying power.
I really do want Cman to continue his informative postings. I agree with MFOer davidrmoran that his postings are often elliptical, but when decoded with care and when the unsupported proclamations are discarded, the submittals are substance intense and useful.
I’m positive that Cman will respond; that’s his nature and it’s fully expected and respected. Cman likes to morph simple problems into multilayered complex problems. Remember the classic WWII submarine movie titled “The Enemy Below”. It starred Robert Mitchum and Curt Jurgens as competing captains. The movie plot revolved around the “if I do this, he’ll do that, but he knows I know that so I’ll alter my tactics, but he’ll anticipate that change, so I’ll …..” endless logic circle.
In the meantime the adversary escapes, at least momentarily in this film classic. At some point the circle must be broken and a decision must be forthcoming (no action is part of the decision options). Studies have a diminishing returns aspect to them.
In the investment world, decisions must be made with incomplete information and always with an uncertain future. Further study and delay adds no value. So just do it or not, given a current assessment of the circumstances. I hope my positions on this matter are not elliptical.
Best Wishes to everyone, and especially to Cman.
But I am most certainly posting this out of amusement than any anger or animosity because I finally figured him out. Life is too short to be angry about forum postings but I can now understand outbursts from people like MarkM earlier.
I have not been in the forum long enough to know the participants well. But some are easier to peg than others. @MJG is certainly a unique character in writing but I have seen some strong reactions to his posts from people who detect a passive aggressive attack in his postings when he disagrees while the reactions are very favorable from some.
It took me a while to figure out his posting style and what it is that creates such a diverse set of reactions despite such passive aggressive attacks, back handed compliments, tangential lines of thought, emotional string pulling but often with large set of holes in the argumentation. The total lack of direct interaction with whom he is responding to always using a third person was also curious.
Then I got it. He has excellent lawyering skills in his style of discourse which is what he does in every post. The audience is the jury and every post is aimed at convincing the jury using the various devices including all forms of obfuscation and jury manipulation to make them sympathetic to the argument even if flawed. Lawyers seldom try to argue with the opponent. Convincing the accuser is not the goal but convincing the jury is. So, it is a peeformance art. Perhaps, that was his profession or he is a home-schooled natural. He is very good at it. I will use the post I am responding to as an illustration of these points below.
Unfortunately, such a style of argumentation is not conducive to arriving at truth or knowledge because a lawyer's goal is to prevail in an argument not necessarily to arrive at the truth or reality. Logical fallacies are fine as long as they are not caught by the opponent. Tangential and emotional manipulation of the jury even if to mislead are par for the course. Statements can be established as true in jury's mind just by frequent repetition.
I suspect he thought about the best approach to this post that is best to convince the "jury". One can address the argumentation directly if you can find flaws and so nullify it or you can attempt to destroy/lower the credibility of the opponent indirectly to attempt to nullify the argument. He appears to have chosen the latter primarily which is actually a testament to soundness of my points indirectly.
Pull up a chair and get some popcorn for the illustrated guide to lawyering techniques.
This is in multiple parts due to forum limitations.
In this case, for example, the opponent posted logical flaws in a paper used as evidence. Pointing logical flaws aren't opinions or assertions requiring documentation. They are either valud or not and can be refuted by a ligical argument alone if flawed. But what if it is not flawed? Claim something else.
With most jury, especially if you have prepared them well, will not realize such subtleties, especially if what you are responding to is separated temporally and/or spatially. So, it is perfectly safe to make the absurd accusation that such points require documentation and hope the jury does not catch it. Having suggested that the opponent is trying to pull wool over the jury's eyes earlier with pedantic or subject matter expertise predisposes the jury to believe this assertion anyway. Irrelevant quotes are always a good idea to introduce an accusation whether it is true or not. All you are trying to do at this point is sow doubt in the jury, not establish truth or facts. Quotes distract the jury to your advantage. Enjoy the irony with a smirk when your own attack against the opponent is an indefensible generalization.
For example, Junk Science was used to describe a method posing as science in which logical flaws and unsupported generalized conclusions were pointed out. It is a phrase used to describe such flawed methods posing as science. Just hope the jury is not aware of it and imply that the accuser is using those terms to establish the point itself as opposed to characterize the point established.
The imputation does not have to be logical. Opponent's suggestion to do a further study to test the reality rather than the flawed study making an unjustified assertion to arrive at the truth is in the interests of establishing the interests of costs and results. But it is important to cherry pick the opponent's post to support your narrative. Remember that it is about convincing the jury of one's own view, not establishing the truth. So if the approach is to attempt to destroy the credibility of the opponent, pick and choose carefully to establish the narrative. If you are feeling confident of the jury's capabilities (or rather lack of), you can even put up a straw argument to shoot down. You can always count on the jury not to verify the veracity. Opponent's suggestion of a better constructed study to arrive at the answer and setting up a criterion that will allow establiahing your own point is hardly closing the debate but since you are cherry picking and establishing a narrative it would be wise to impute just the opposite and hope the jury will not catch on.
There is no controversy about the performance after fees with that limitation in selection, so repeating this without the actual objection contributes to establishing credibility of the evidence. Remember, it is about convincing the jury, not arriving at the truth or knowledge. With that, it is time to go on the attack again. By this time, the jury has tuned out or asleep to notice misquoting or mischaracterizing the opponent. For example, you can take a statement that talks about both before and after in the same sentence as a disingenuous attempt to emphasize the former. Strong words like disingenuous wake up the jury and it will stick. Now attempt to cast the opponent as destroying the credibility with strong words (while you smirk at the irony) rather than pointing out the flaws and limitations of the study to model reality. If the jury is still listening at this point, they will think it true because you have repeated often enough.
You can make the same assertion that the argument against the study requires documentation without mentioning that the only documentation needed to support a logical argument of the valid inference and limitations of the study is a book in logic. But the jury will think the opponent made some unsubstantiated claim of fact. Remember that it is all about credibility and narrative, not arriving at truth and knowledge. You can also use logical fallacies to establish the credibility of your evidence. One may create a defective report without incentives. It may not be defective at all for the audience it is targeted towards because it confirms a widely held view and there is a financial incentive for that purpose. But claiming ignorance of any such thing and asserting it must be valid because otherwise it would damage the firm is a fallacy of false choice since it assumes they are either necessarily aware of it or that if they were aware of the shortcomings they would necessarily care for the purpose it is used. The fallacy of argument from authority is always a useful tool to have in one's pocket because it allows you to throw in a lot of irrelevant data. One can be all that and still write a flawed or a falsely concluded article but it always impresses the jury to throw credentials.
It is also useful to slip in the mischaracterization of the opponent for a final take away point. The opponent is only providing a choice between endless loops and action now. This will obfuscate and hide the opponent's constructive suggestion of a study that will more realistically prove or disprove the same claims to replace a flawed evidence. Jury may be excused for losing track of that by this time. Always a good idea to end with a gentlemanly and passive aggressive conclusion to obscure the real intent and motivation.
Look forward to writing the next chapter of the "Illustrated Guide to Lawyering tactics".
There are still many tools left to use in a lawyer's arsenal to influence the jury such as righteous indignation, befallen misfortunes in getting to the court, Jury nullification, etc.
I hope @mjg will oblige by providing further illustrative examples.
He then strives to impress us with his erudition by a showy display of what he believes to be an extensive vocabulary, reminiscent of a feature of the Reader's Digest back in the 1940's called "It Pays to Increase Your Word Power". Never use a short or common word when a long or fancy one is available! Oddly enough, he evidently fails to recognize "hubris" when it stares him in the face: I once defined it for him, but to no avail.
Your observations are accurate: he would indeed have made a good lawyer, at least from the perspective of courtroom posturing and slight-of-hand, but it is my belief that he comes from the engineering side of the intellectual universe. I've attempted to point out that human behavior, especially in the financial or investment arena, is so subject to emotional inputs that it's complexity frequently defies accurate reduction to an engineering or mathematical algorithm: the frequent failures of the financial "quants" and the pathetic desire of academic financial "authorities" to have their "junk science" accepted as a legitimate branch of engineering are testimony to that.
I finally succeeded in irritating him to the extent that he no longer recognizes me when I raise my hand for a question or comment. Your post (above) might also earn you the same compliment. Good work!