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Blurred Lines Between Active and Passive Investing
Absolute drivel now follows: After a few decades of observation, I think the "stock picker's market" refers to a directionless plateau where a small fund can make a few dominant picks, which must be held long enough to reach the five- or ten-bagger level, whereupon they sell or you sell and select the next great manager to which you will entrust enough money to matter. This is difficult. Big funds rarely can buy enough of a stock to affect the bottom line. I have not found these great managers. The "active share" concept is great, unless the manager is selecting stocks no one else likes.
My observations of the recent MFO large cap small funds stock holdings suggests a mutual fund or ETF with "quality" in the name (reviewed by you, the astute investor, to be sure their idea of quality coincides with yours) might do as well, more cheaply. Funds selecting smaller, less followed companies have an advantage.
The insightful "Relentless Bid" column by Josh Brown seems to explain why dips are now so short and shallow, until everything falls apart. It deserved to go viral, if it did.
Brownian motion is active, after all. Aaah, maybe this is only relative drivel.
Comments
We go through stages of bull markets. Some are broad based and others are a stock pickers market.
My observations of the recent MFO large cap small funds stock holdings suggests a mutual fund or ETF with "quality" in the name (reviewed by you, the astute investor, to be sure their idea of quality coincides with yours) might do as well, more cheaply. Funds selecting smaller, less followed companies have an advantage.
The insightful "Relentless Bid" column by Josh Brown seems to explain why dips are now so short and shallow, until everything falls apart. It deserved to go viral, if it did.
Brownian motion is active, after all. Aaah, maybe this is only relative drivel.