Rational Reminder is the best podcast out there. Crazy how much less I knew before I started listening.

Rational reminder is a living example of "exceptional performance". Thank you.

This summary is gold. I hope there are more to come on other topics.

Please keep doing these summaries, the wealth of knowledge across episodes is so vast that without help like this it’s impossible to digest by plebz like me.

Having summaries for topics which multiple guests have discussed is a wonderful idea!

Grossman Stiglitz paradox - exactly. Requires the investor to time the market for when to move to active from index, then active needs to outperform in excess of fees, and do this in the long run.

The more Ben informs the world…the more his hair grows

Yes, I come here thinking it would be you on your other channel but I liked either way. I usually hear the podcast also but I miss your videos with all the info graphics popping up. 😊

Fantastic summary of the discussion across different episodes, thankyou!

Da, uskoro će prosečan money manager biti bolji od proseka. Bravo, jedva čekam.

Thanks, super helpful

Do you know of any evidence of Berk's statement that the larger fund managers do add value? We know research shows that active fund managers don't outperform the index after costs. So do these studies show that larger managers indeed do much better than smaller managers? I never did Ben Felix mention this before when he summarises research on active managers' performance. Thank you for the great YT channel.

@rationalreminder

Жыл бұрын

There is extensive evidence, but the evidence does not suggest that skilled active managers in an efficient market produce net alpha, which is what investors care about. They do, however, produce gross (before fees) alpha which demonstrates their skill. We discussed this at great length with Professor Berk rationalreminder.ca/podcast/220

0:55 At this point, won't actively managed funds either (1) raise their fees, or (2) become flooded with investment until their returns fall? How can you have excess returns in an active fund without investors exploiting it?

@thomasowen2585

Жыл бұрын

How can we have had investors exploiting higher returns from passive funds for so long, if the above (excess returns in active funds) also isn’t possible? People are fallible and are often slow to react to changes.

@rationalreminder

Жыл бұрын

This is exactly what we expect to happen in equilibrium. Skilled active managers attract capital to the point where their net alphas are 0. If there is too much in active, net alphas are negative, and if there is not enough, they are positive.

Hair

This is never going to happen. The talent pool is not going to grow. 9/10 managers can’t beat the s&p500. And of the 1/10 who do over a period of 10-12 years most of them fail. And there is always going to be avrage investors who trade regular stock. Most investors are greedy and want’s more than the s&p500. The belief that the avrage investor is going to be rational and not emotional is simply foolish. Most investors are greedy in bullmarkets and panic in bear markets. And all the narcissistic managers are always able to fool the public into their « hedge funds». Brilliant salesmen selling the con story that they can beat the s&p500