The Decline and Fall of Fund Managers

An article in last weekends WSJ by Jason Zweig The Decline and Fall of Fund Managers discusses the big transition away from stock picking to beat the averages and instead just buying the average.

The debate about whether you should hire an “active” fund manager who tries to beat the market by buying the best stocks and avoiding the worst—or a “passive” index fund that simply matches the market by holding all the stocks—is over.

So says Charles Ellis, widely regarded as the dean of the investment-management industry.
Stock picking “has seen its day,” he told me this past week, as assets at Vanguard Group, the giant manager of market-tracking index funds, approached $3 trillion for the first time. “With rare exceptions, active management is no longer able to earn its keep.”

When I see headlines and article like that I have a tendency to put my contrarian hat on; Maybe it is time to concentrate on individual stocks and forget indexing or at least move a portion of your funds into stock picking.

PrudentTrader already has stock picking information and methods on site. The stock watch list being the obvious choice. There is also extensive data to drill down from Sector to Industry Group to Individual Stocks. I think we can do more  😉

I am thinking of deleting the relative strength blinkers in the database for stocks and moving to a more simplified methodology.  Perhaps I can like the Database Excel spreadsheets, have for individual stocks Victor Sperandeo’s SPDTI, Overweight and Underweight ratings, and perhaps the SAR as well as Chuck LeBeau’s Chandelier. I also can and often do download fundamental data from Yahoo finance that can be included. The key to it all though will be search ability. Can I create that database with programs that will allow you to search for stocks with the conditions you want to see.

Bottom line is yes I can create that database what I may have difficulty doing is writing the php programs that will allow you to choose your database search criteria. Well before I move on this way let me ask a question of all of you: Can any of you do ,php programming or know of another way to go about this. The databases used are MySQL databases that are provided by my web host.

Many of these searchable databases are already available but without some of my proprietary work and also at a substantial cost.

Talking Points and Behind the Rebirth of Indian Motorcycles:

Indian Motorcycles used to be a local company near where I live. My wife’s grandfather worked for them way back when.  😎

Who Pays Corporate Taxes? Possibly You (HBR)
Financial Beliefs You Might Not Like (WSJ)
Active Versus Passive Is the Wrong Question (Morningstar)
What Stage of the Bull Market Are We in? (A Wealth of Common Sense)
There Are Millions of Michael Browns In America (FiveThirtyEight)
What keeps me awake at night (Cam Hui)
The Bull Market’s Strength Is Reaching Epic Proportions (MoneyBeat)
Hiding in Plain Sight (Robert Seawright)
You’ll never guess what Facebook is cracking down on now (Re/Code)
Company Fundamentals – What Has Changed In The Past 10 Years (GaveCal)
Big Loser in West Coast Quake: Napa Valley Wineries (WaPo)
The Greater the Stock Bubble, the Less Monetary Theory Holds (Alhambra)
Buffett’s Burger King Move To Canada Reeks Of Hypocrisy (I B D)
Read More At Investor’s Business Daily:
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The Federal Reserve Is Not as Powerful as You Think It Is (Slate)
The U.S. bull market looks like the dot-com bubble of the late 1990s, except when it comes to valuations. (Bloomberg

Behind the Rebirth of Indian Motorcycles

Have a Great Day!