A crazy insight: Quartile 2 and 3 managers have the highest probability of being in Quartile 1 and quartile 2. Thanks for such a well researched take on the topic.
Big kudos to you Prof. Great insights & breakdown on the active vs passive debate. Good ending point on positive utility as an active investor. As a side note, the comparisons made are on the basis of raw returns. How about risk-adjusted returns? And as for multi-asset funds, perhaps a more appropriate benchmark is an equally blended one for better comparison.
Super sir! Your insights are torch bearers for many long term investors like me around the world. Thank you very much for the generous gesture of making all your teachings free.
Well put together sir, completely second your conclusion on active investing, could relate with your throught process quite alot, as at the end of the day the journey (process) is more important than the destination (outcome).
Prof. Damodaran, if an active investor invests across markets (equity, debt, derivatives, private and beyond) but has a an index the equity S&P 500, they may be able to beat the S&P -- but isnt that just arbitrage of what is the benchmark; and passive alternatives do not exists for some of the markets ....
Respected Sir, Thank a lot for your kindefforts to make valuable knowledge of Finance Management as resources available to all who have inquisitive flare of learnings......
Jack Bogle wrote a piece in the FT last week suggesting that governments should have closer look at ETFs... because he thinks they cost investors more money than index mutual funds. Crazy... anway, superbe video.
First of all, great video and videos. I very much appreciate them and I am a subscriber. Question: Why wait until you are 85? Would you be willing to publicly share the return rates that you've enjoyed on your own personal investments over your career so far? Just rates of return, not anything specific beyond that. Personally, I would be very curious to see the numbers but I can also see how you might view this as off limits. Perhaps you've already shared this somewhere but I couldn't find it quickly. Again, great videos and thank you for providing a window into the world of valuation and investing like no one else has.
Quick question: how does my total return change if I am a passive investor holding index ETFs and selling covered out-of-money calls on them? Shouldn't I beat the market in the long-run if I keep premiums on the options in 60-70% of time?
Thank you for your videos . Respectfully , why don’t you attribute growth in pasive investing in the last 15 years , in part - to financial crisis of 09’ ?Smart active became pasive investing during crash. Thank you
To be fair 50% of Buffets portfolio is in Apple stock at this stage so I think it would be fair to argue he is taking on a disproportionate amount of risk which just happened to pay off this time.
I just watched this video (8/24/18) and I noticed that the statistics all refer to institutional investors, I wonder if there are any statistics regarding the success (or lack of it) for active retail investors.
Actually, the only ones that claim their subgroup (i.e. style) can beat the market (as at 6:45) are the underperforming ones, cause you cannot reliably pick the winning style. You have to provide something on top to be chosen, so this looks like a straw man argument.
Suppose you start out with a $1,000,000 portfolio and invest actively because you "enjoy it" for 30 years. Suppose the performance is on average 1% lower than indexing per year. Well, you spend $10,000 per year on your hobby, but you are also out way more than 30%, or $300,000, at the end of the game due to compounding. Furthermore, unless you are brilliant at managing volatility, you might not do that consistently, either. That's a very, very expensive hobby. I would rather have a second home or enough money to send two children to a private college.
Spoken like a true academic...The primary reason why Buffett's overall alpha vs. the market has declined is because he manages hundreds of billions.... nothing to do with the time period he invested in.
Thank you Sir.
I'm a regular follower and thanks for everything you share with us. Thanks for everything. It helps a lot :)
Simply Superb. He is extremely practical and honest.
A crazy insight: Quartile 2 and 3 managers have the highest probability of being in Quartile 1 and quartile 2. Thanks for such a well researched take on the topic.
Big kudos to you Prof. Great insights & breakdown on the active vs passive debate. Good ending point on positive utility as an active investor.
As a side note, the comparisons made are on the basis of raw returns. How about risk-adjusted returns? And as for multi-asset funds, perhaps a more appropriate benchmark is an equally blended one for better comparison.
Super sir! Your insights are torch bearers for many long term investors like me around the world. Thank you very much for the generous gesture of making all your teachings free.
Well put together sir, completely second your conclusion on active investing, could relate with your throught process quite alot, as at the end of the day the journey (process) is more important than the destination (outcome).
Learning a lot, really good teaching. Thank you, sir
i thought that siren sound came from my back yard(1:30)
Prof. Damodaran, if an active investor invests across markets (equity, debt, derivatives, private and beyond) but has a an index the equity S&P 500, they may be able to beat the S&P -- but isnt that just arbitrage of what is the benchmark; and passive alternatives do not exists for some of the markets ....
This guy is the best guy!
Respected Sir, Thank a lot for your kindefforts to make valuable knowledge of Finance Management as resources available to all who have inquisitive flare of learnings......
Great insight. Thanks
Jack Bogle wrote a piece in the FT last week suggesting that governments should have closer look at ETFs... because he thinks they cost investors more money than index mutual funds. Crazy... anway, superbe video.
Great video.
Great video. Thanks1
First of all, great video and videos. I very much appreciate them and I am a subscriber. Question: Why wait until you are 85? Would you be willing to publicly share the return rates that you've enjoyed on your own personal investments over your career so far? Just rates of return, not anything specific beyond that. Personally, I would be very curious to see the numbers but I can also see how you might view this as off limits. Perhaps you've already shared this somewhere but I couldn't find it quickly. Again, great videos and thank you for providing a window into the world of valuation and investing like no one else has.
Quick question: how does my total return change if I am a passive investor holding index ETFs and selling covered out-of-money calls on them? Shouldn't I beat the market in the long-run if I keep premiums on the options in 60-70% of time?
Thank you for your videos . Respectfully , why don’t you attribute growth in pasive investing in the last 15 years , in part - to financial crisis of 09’ ?Smart active became pasive investing during crash.
Thank you
Aswath sir, this year Buffet beat the S&P 500. We would love to have a video on the response to that.
To be fair 50% of Buffets portfolio is in Apple stock at this stage so I think it would be fair to argue he is taking on a disproportionate amount of risk which just happened to pay off this time.
I just watched this video (8/24/18) and I noticed that the statistics all refer to institutional investors, I wonder if there are any statistics regarding the success (or lack of it) for active retail investors.
Retail investors are doing even worse than professionals.
Actually, the only ones that claim their subgroup (i.e. style) can beat the market (as at 6:45) are the underperforming ones, cause you cannot reliably pick the winning style. You have to provide something on top to be chosen, so this looks like a straw man argument.
Suppose you start out with a $1,000,000 portfolio and invest actively because you "enjoy it" for 30 years. Suppose the performance is on average 1% lower than indexing per year. Well, you spend $10,000 per year on your hobby, but you are also out way more than 30%, or $300,000, at the end of the game due to compounding. Furthermore, unless you are brilliant at managing volatility, you might not do that consistently, either. That's a very, very expensive hobby. I would rather have a second home or enough money to send two children to a private college.
Spoken like a true academic...The primary reason why Buffett's overall alpha vs. the market has declined is because he manages hundreds of billions.... nothing to do with the time period he invested in.