Active Management Quotes

Active management is little more than a gigantic con game.

Index funds have regularly produced rates of return exceeding those of active managers by close to 2 percentage points. Active management as a whole cannot achieve gross returns exceeding the market as a while and therefore they must, on average, underperform the indexes by the amount of these expense and transaction costs disadvantages.

I can't figure out why anyone invests in active management, so asking me about hedge funds is just an extreme version of the same question. Since I think everything is appropriately priced, my advice would be to avoid high fees. So you can forget about hedge funds.

Active management is a zero-sum game before cost, and the winners have to win at the expense of the losers.

It is very hard, if not impossible," he wrote in his study, "to justify active management for most individual, taxable investors, if their goal is to grow wealth." And he said that those who still insist on an actively managed fund are almost certainly "deluding themselves.

Everybody has a different strategy, but everybody agrees that active management does not beat the market.

Failing organizations are usually over-managed and under-led.

... the best way to own common stocks is through an index fund.

Get inside information from the president and you will probably lose half of your money. If you get it from the chairman of the board, you will lose all of it.

Do not buy the hype from Wall St. and the press that stocks always go up. There are long periods when stocks do nothing and other investments are better.

Commodities tend to zig when the equity markets zag.

Properly measured, the average actively managed dollar must underperform the average passively managed dollar, net of costs. Empirical analyses that appear to refute this principle are guilty of improper measurement.

Most investors would be better off in an index fund.

Bottoms in the investment world don't end with four-year lows; they end with 10- or 15-year lows.

Index investing outperforms active management year after year.

Active management strategies demand uninstitutional behavior from institutions, creating a paradox that few can unravel. Establishing and maintaining an unconventional investment profile requires acceptance of uncomfortably idiosyncratic portfolios, which frequently appear downright imprudent in the eyes of conventional wisdom.

My career in academic research has not been involved with active management of securities. I've tried to understand risk-and-return relationships; also the pricing of derivative securities.