4 Managers Who Consistently Beat the Market

Ted

FYI: (Scroll & Click On Article title At Top Of Google Search)
Nobody said beating the market is easy. In any given year, historically speaking, fewer than half of active managers beat their benchmark, and about half of those do so purely as a matter of chance. There are, of course, some managers who beat the market year after year after year—but determining which manager is going to do that is next to impossible.
But not totally impossible.

Just four funds made the cut, all led by managers who are venerated in the industry, but not exactly household names. The biggest, $25.7 billion Harbor Capital Appreciation (ticker: HCAIX), has been run by Sig Segalas of Jennison Associates since 1990. The standout performer was Sam Isaly, a star in health-care investing but less well-known in the diversified stock fund universe; he steers the $1.6 billion Eaton Vance Worldwide Health Sciences (ETHSX). The other two were Jerome Dodson, manager of the $708 million socially responsible Parnassus fund (PARNX), and a little-known investor named David Carlson, whose $2.2 billion Elfun Trusts (ELFNX) is open only to General Electric’s 300,000 U.S. employees and retirees.
Regards,
Ted
https://www.google.com/#q=The+Market+Beaters+Barron's

davfor

Thanks @Ted. This quote from ETHSX 's Samuel Isaly caught my eye: "...he’s optimistic about gene editing and new technologies, and about large, profitable biotech companies. “Their valuation measures are roughly the same as the S&P 500,” he says. “That has happened like, twice, ever—and the last time was during Hillarycare in the 1990s.”"

DavidMMP

Samuel Isaly is well known and respected in the healthcare investment community and OrbiMed Advisors is very successful.

vkt

Has anyone pondered the obvious question before taking such media articles for granted?

Why would you consider the manager of a sector fund as extra-ordinary in having beaten the S&P 500 when the sector itself has been beating the S&P 500? Even a sector index fund would have outperformed S&P 500. Looking at the performance of ETHSX in M*, it appears to have underperformed the M* Health index over the last 3, 5 and 10 years.

Isaly is a 700-lb gorilla in Health investing (and part of the reason for snowballing growth in healthcare investing that self-sustains the performance). But there are good reasons to be in his hedge fund that hedges against big pharma by also participating in VC funding from early stage to pre-IPO companies so if big pharma were to falter with pipeline issues, his fund would still do Ok. The same wouldn't be true of all the retail health care funds overloaded with big pharma.

Like all fund managers, he talks his book in public. This is not necessarily a bad thing but years of Bill Gross and now Gundlach should have made readers immune to words from fund managers.

vkt

I also want to add that behemoth funds like Orbimed in addition to traditional VC funds are partly responsible for the depressed valuations in big bio-tech for reasons I mentioned in an earlier post. This is how bio-tech startups are now able to last much longer privately well funded even to an IPO stage rather than be acquired early by a big biotech who would have got the biggest benefits from the success of their products. Gilead has been successful partly from making great judgments in evaluation of acquisitions to reduce risk but you cannot do much more of that when the promising biotechs are no longer interested in selling being well funded or their valuations from successive rounds are sky high thus reducing how much the acquirer can get from such an acquisition and reducing the number of companies they can afford to acquire.

davidrmoran

Hear. Why is Isaly on anyone's list? As noted, just look at his performance vs Vanguard, TRP, and Fido in that space.

davfor

Hi @vkt , Fleshing out some knowledge based explanations for the quote I posted above was my goal. So, your comments are appreciated.....

By the way, I strongly suspect most people who participate in this board approach media articles with a fair degree of skepticism! Even so, there are helpful things to be gleaned from them.

Also, after reading the article, I quickly checked M* as you did and also did a quick 10 year search using the MultiSearch tool. It was interesting to compare this fund to VGHAX and to FPHAX (which is my current health care sector investment). ETHSX performed the best by far during the draw down period that ended in 02/09.

davidrmoran

Who goes into that space with defensiveness in mind? I mean, the recovery delta w Fido is 8 months. So who cares? You are gonna get hit and fall down when you get hit.