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"I'll challenge anybody on this site to produce a better stock-picker than Bruce Berkowitz or Cliff Asness."
David Einhorn and Dan Loeb (and Bill Ackman, although he's had the occasional large mis-step - Target, whether or not he'll be eventually proven right with JC Penney I dunno but it doesn't look good), although in the mutual fund industry, there aren't too many Berkowitzes. Jean Marie Eveillard and Marty Whitman before they retired. Will Danoff of Fidelity Contrafund remains a solid long-term performer, and I'd say Romick and Yacktman in the group, as well. I'm not saying those are necessarily better mutual fund managers, but in a similar crowd. I think it's rather concerning that the population of mutual fund managers who have been solid, reasonably consistent performers is small (and seemingly getting smaller.)
I'm not sure how much of Asness is stockpicking. I tend to view Asness to some degree as the captain of the computers. His skill set is more being able to steer quant funds with broad macro and technical (valuation, etc etc etc) views. A different skill set than what Berkowitz is working with, but both impressive.
I thought the article was taking as a given that BB is a great stockpicker. I thought it was sounding a cautionary note to advisors about investor psychology, the difficulty of getting clients to stick with an manager with his style, and the general unwisdom of buying high.
The points made correlate with FAIRX's M* investor returns:
On average, the boring Bogleheads appear to be making out better in the long run, by not outsmarting themselves.
Most mutual fund investors had not heard of Bruce Berkowitz until after he'd had a good run for a while. So most bought in perhaps believing they had the stomach to ride through rough patches, while never having tested that belief.
The data says only a smallish subset of investors will be able to stick through the rough patches. As a group, we are perhaps not brilliant at determining whether or not we are in that smallish subset.
Greg, you got the story...it's about the difference between investor and total returns for FAIRX, and what that difference says about investor psychology. It's not about telling investors to avoid the fund now because it's had a good year.
Hi Scott, good names. Few though like you mention in fund world available to mere morals. Agree on Asness. He's a quant (which I know thanks to you), but I do think that he applies his momentum method, as diligently has BB doubles-down on deep value.
Reply to @Charles: Cliff Asness is the opposite of the stock picker. "Stock picker" term is usually reserved for fundamental investors, not the quants.
Comments
I'll challenge anybody on this site to produce a better stock-picker than Bruce Berkowitz or Cliff Asness.
This is a non-article article.
David Einhorn and Dan Loeb (and Bill Ackman, although he's had the occasional large mis-step - Target, whether or not he'll be eventually proven right with JC Penney I dunno but it doesn't look good), although in the mutual fund industry, there aren't too many Berkowitzes. Jean Marie Eveillard and Marty Whitman before they retired. Will Danoff of Fidelity Contrafund remains a solid long-term performer, and I'd say Romick and Yacktman in the group, as well. I'm not saying those are necessarily better mutual fund managers, but in a similar crowd. I think it's rather concerning that the population of mutual fund managers who have been solid, reasonably consistent performers is small (and seemingly getting smaller.)
I'm not sure how much of Asness is stockpicking. I tend to view Asness to some degree as the captain of the computers. His skill set is more being able to steer quant funds with broad macro and technical (valuation, etc etc etc) views. A different skill set than what Berkowitz is working with, but both impressive.
I thought the article was taking as a given that BB is a great stockpicker. I thought it was sounding a cautionary note to advisors about investor psychology, the difficulty of getting clients to stick with an manager with his style, and the general unwisdom of buying high.
The points made correlate with FAIRX's M* investor returns:
http://performance.morningstar.com/fund/performance-return.action?p=investor_returns_page&t=FAIRX
Contrast these with a dull index fund's investor returns:
http://performance.morningstar.com/fund/performance-return.action?p=investor_returns_page&t=VTSMX
On average, the boring Bogleheads appear to be making out better in the long run, by not outsmarting themselves.
Most mutual fund investors had not heard of Bruce Berkowitz until after he'd had a good run for a while. So most bought in perhaps believing they had the stomach to ride through rough patches, while never having tested that belief.
The data says only a smallish subset of investors will be able to stick through the rough patches. As a group, we are perhaps not brilliant at determining whether or not we are in that smallish subset.
Greg, you got the story...it's about the difference between investor and total returns for FAIRX, and what that difference says about investor psychology. It's not about telling investors to avoid the fund now because it's had a good year.
Hi Scott, good names. Few though like you mention in fund world available to mere morals. Agree on Asness. He's a quant (which I know thanks to you), but I do think that he applies his momentum method, as diligently has BB doubles-down on deep value.
naming convention police.