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Phill
Member
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 Posted: Fri Feb 04, 2005 3:22 am Post subject: Can fund managers add value? |
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Given the efficiency of modern financial markets it is said that every
stock and share is correctly priced based on all available public
knowledge. Therefore we should do as well picking investments throwing
darts at the financial page - or buying an index tracker - rather than
trusting professional fund managers. Better in fact, because we won't
have to pay their fees.
Is there any research which either proves or disproves the above? I do
not mean 1-off results where a managed fund has beaten its index as
such results can easily be produce by careful selectivity. |
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James H.
Member
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| Posted: Fri Feb 04, 2005 3:23 am Post subject: |
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I would suggest a book for you. You will get all your questions
answered about index funds. I think this book is a must read before
anyone invests a penny in the market.
Book Title: A Random Walk Down The Wall Street |
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TABtrader
Member
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| Posted: Fri Feb 04, 2005 3:24 am Post subject: Re: Can fund managers add value? |
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| Phill wrote: | Given the efficiency of modern financial markets it is said that every
stock and share is correctly priced based on all available public
knowledge. Therefore we should do as well picking investments throwing
darts at the financial page - or buying an index tracker - rather than
trusting professional fund managers. Better in fact, because we won't
have to pay their fees.
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That is said by looters and pillagers of publicly owned companies
who want *your* money and everybody else's to abuse for purposes
of buying trash paper that has already been reduced to de facto
bankrupt, deficit tangible equity, debt load egregious status by
their criminal thefts of stockholders equity by such means as
"stock buybacks" at ludicrous multiples of net tangible equity.
The "indexes" are full of such trash stocks, already put into "at
whim" bankrupt status. Nearing three hundred such, that I know
of for sure from having taken the time to analyze each one
individually.
I am not suggesting that anyone "trust professional fund
managers" because they are by and large herdlike critters getting
drunk at the same pubs, listening to the same liars from the
cadres of fascist criminal munchiments, and trusting to their
group *power* to make the ludicrous "so" simply by focusing their
elephant herd buying and selling onto the trash paper that they
toss around in the air with their trunks full of other people's
money. In the short run they can get away with it.
I am suggesting that only by reading and analyzing individual
stocks oneself can it become possible to select a portfolio that
has any chance of surviving the inevitable mass bankruptcies
which have been built into the financial system by that combination
of criminal thefts, wrongful allocation of resources, and herd
activities. Even some apparently sound companies are likely to
be taken down in those inevitable mass bankruptcies because of the
domino effects of "accounts receivable" from known bankrupts "with
good credit ratings" from the de facto bankrupt credit raters.
Hence, at this period in history, the original theory behind
gross diversification (index funds) has been destroyed by looting
and gutting all of the biggies so as to turn them into shell
corporations devoid of net worth, relying on perpetual increases
in their already ludicrous debt loads merely to cover expenses.
Statistical studies on *past* events have no value whatever
in the context of an intentionally created mass bankruptcy similar
to, albeit larger in scope, than the mass bankruptcies of the 1930s. |
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Fitzroy
Member
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| Posted: Fri Feb 04, 2005 3:26 am Post subject: Re: Can fund managers add value? |
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| TABtrader wrote: | their criminal thefts of stockholders equity by such means as
"stock buybacks" at ludicrous multiples of net tangible equity. |
OK TABorder. The time has come for a rational debate on stock
buybacks.
I am not denying that some buybacks are not detrimental
to the equity of continuing shareholders (an obvious
example is the cynical propping up of the share price
so that management's options vest).
Forget buybacks at or below Net Tangible Equity.
For any half-decent company, assets are going to be
valued on a 'going concern' basis.
There must surely be occasions where stock buybacks
are beneficial to continuing shareholders. |
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