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How Active Managers Are Fighting Back

Discussion in 'Managed Funds & Index Funds' started by Tropo, 8th Feb, 2018.

  1. Tropo

    Tropo Well-Known Member

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    twisted strategies likes this.
  2. twisted strategies

    twisted strategies Well-Known Member

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    i am quite happy to invest in active managers ( via LICs and REITs )

    i buy them when they are doing poorly ( for investment climate reasons ) and under-valued ( often at a NTA discount AND discount to historical earnings .

    yes many are struggling currently ( but so am i if i was made to jump an ambitious hurdle )

    the better active managers will have both good and bad times again , more efficient selection and management , will be nice if it works properly
     
    Redwing likes this.
  3. Tropo

    Tropo Well-Known Member

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    Why don't you learn how to invest ?
     
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  4. twisted strategies

    twisted strategies Well-Known Member

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    i do , but have now been forcibly retired ( on DSP ) now ( since 2017 )

    and don't have a full skill set , i hire managers ( via LICs and REITs ) that have skills that i am below par in ..

    roughly 12.5% of my holdings was inherited ( and i made those cash-risk free )

    i hold several ETFs , REITs and LICs but about 50% of the holdings has been stock-picked with varying success ( from outrageously lucky , to total cash loss and zombies [ waiting to fail completely )] and some 'freebie ' demergers ( like SCP , SYD , S32 etc. )

    of the roughly 250 equities i hold , i claim only one planned success that was MQG ( av. SP @ $26.76 ) where in 2011 i could see a 50% growth in 5 years at acceptable risk .

    however from late 2010 to now it is still a learning curve , i wouldn't dare to claim i was experienced ..

    so unless i get another unexpected inheritance ( unlikely, but so was the portfolio inherited ), i have a hand of cards ( and no major cash inflows expected ) that i will just have to play the best i can .

    if a fund manger can do something better than me ( and the vehicle is trading at good value ) why not utilize the opportunity BUT WATCH and hopefully learn an extra few tricks .

    i can tell you in hindsight it is not easy to create an 'instant retirement income fund ' in 9 years but then have it curtailed suddenly to just 7 years .

    ( any industry professionals feeling lucky i didn't knock on your door ?? )

    you can have the best laid plans in the world , but a bit of flexibility can go a long way , just the same
     
  5. JoelVermeer

    JoelVermeer Member

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    The conclusion from this very recent study would seem to suggest that the average investor has basically no chance of being able to assess whether an active manager can outperform their benchmark over the longer term... Or is there another way to interpret this study that I am missing?

    Quick factoid: Of those active funds that outperformed their benchmark over a 15 year period, the average period of underperformance within that period was about 9 years!

    Quick quote : "The main implication of these findings is that standard performance-measurement periods, such as three, five, or even 10 years are far too short to evaluate a manager with confidence. Investors who believe they picked a good fund must show more patience than is commonly assumed."
     
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  6. Hodor

    Hodor Well-Known Member

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    Whatever anyone claims remember that it's a zero sum game.
     
  7. twisted strategies

    twisted strategies Well-Known Member

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    i have a theory that a good active manager will make money when i am struggling ( so call it income protection , if you like )

    so i try to buy ( LICs with ) active management ( including aggressive and opportunistic ) types when they are struggling because the market doesn't suit them ( and the unit prices are cheap )

    a subtle twist on Buffet's buy when others are fearful .

    i don't expect active managers to win every year ( for me ) but as long as they are not ripping up capital in their bad years , i can usually do well with the boring long term hold stuff
     
    Luke83 likes this.