9 ms·

In the active v/s passive debate it has now become widely clear that passive wins ALL the time when controlled for risk. I wonder what the market for such a pr

In the active v/s passive debate it has now become widely clear that passive wins ALL the time when controlled for risk. I wonder what the market for such a product is compared to main stream actively managed funds. Why should I choose some unknown "expert" off the Internet instead of say Bill Gross, Peter Lynch or John Neff?

zallarak 11y ago
You aren't choosing an unknown expert. You can examine their track record and investment rationale, and copy them on a trade-by-trade basis. Think of this as an idea surfacing website, not a place to just blindly copy people (although some people may choose to do so). Our thesis is that our platform will surface interesting small-cap investments that would otherwise be undiscovered by the average retail investor. There is a huge advantage to managing under $1M. “If I was running $1 million today, or $10 million for that matter, I’d be fully invested. Anyone who says that size does not hurt investment performance is selling. The highest rates of return I’ve ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It’s a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that.” - Warren Buffett Finally, I agree passive management is an important part of someone's portfolio. I'd argue it should be the majority of most peoples' portfolio, but I would never say its a silver bullet. In my personal Instavest account, I search for higher returns in small cap, less efficiently traded companies.
- peteretep 11y ago
  > You can examine their track record If they were choosing randomly, you would still see a population with a great track record ... but no reason to think it would continue. Given that active investors as a whole are shown again and again to be unable to beat the market, I'm not sure why this time is meant to be different.

zallarak 11y ago

You aren't choosing an unknown expert. You can examine their track record and investment rationale, and copy them on a trade-by-trade basis. Think of this as an idea surfacing website, not a place to just blindly copy people (although some people may choose to do so). Our thesis is that our platform will surface interesting small-cap investments that would otherwise be undiscovered by the average retail investor. There is a huge advantage to managing under $1M. “If I was running $1 million today, or $10 million for that matter, I’d be fully invested. Anyone who says that size does not hurt investment performance is selling. The highest rates of return I’ve ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It’s a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that.” - Warren Buffett Finally, I agree passive management is an important part of someone's portfolio. I'd argue it should be the majority of most peoples' portfolio, but I would never say its a silver bullet. In my personal Instavest account, I search for higher returns in small cap, less efficiently traded companies.

peteretep 11y ago
> You can examine their track record If they were choosing randomly, you would still see a population with a great track record ... but no reason to think it would continue. Given that active investors as a whole are shown again and again to be unable to beat the market, I'm not sure why this time is meant to be different.