Barron's: Big Money Fibbers

There are many surprising findings in a wildly bullish Barron's "big money" poll this weekend of professional fund managers, but a lot of it is explained by the chart I have excerpted here. There is pretty much zero chance that 83% of these fund managers are beating the S&P 500 in 2008, so the rest of their views should be discounted appropriately.

More here.

Comments

[Ted H:]

Paul - Why do you think there's a "zero chance" fundmanagers in the Barrons article were beating the market? It's not hard to do. The "market" is commonly defined as individual indexes such as the S&P 500 index - which is way too narrow a definition. The fundmanagers can beat the index simply by deeply (not excessively) diversifying their allocations. Diversification enables them to (misleadingly) out-perform the "market". My experience in the portfolios I manage is that diversification outperforms the market indexes by about 25%

2008 Nov 02 09:35 AM

[sunny129:]

I agree and every one should accept that figures with truck load of salt!

1. Historically 85-90% of managed funds FAIL to beat stock indexes.
2. "beating S&P' claim could be that their fund down just 39% compared to S&P's 40%!
3. Diversification in itself, especially in over valued (perceived or real) assets will not shield from Mkt drop!
4. The 'only ones' may be the ones who used PUTS and or inverse Bear ETFs/Mfunds in a 'timely' fashion, which is subjective and elusive. I was up by 7% in July but slightly under 2% from peak in Oct '07 by using above strategy. I am down b/c Free Mkt has been repeatedly violated by Central Banks/Govts!

5. Hardly any of the MFunds use these tools to protect the erosion of investors' portfolio, very sad indeed.



On Nov 02 09:35 AM Ted H wrote:

> Paul - Why do you think there's a "zero chance" fundmanagers in the
> Barrons article were beating the market? It's not hard to do. The
> "market" is commonly defined as individual indexes such as the S&P
> 500 index - which is way too narrow a definition. The fundmanagers
> can beat the index simply by deeply (not excessively) diversifying
> their allocations. Diversification enables them to (misleadingly)
> out-perform the "market". My experience in the portfolios I manage
> is that diversification outperforms the market indexes by about 25%

2008 Nov 02 12:24 PM

[DougM:]

Heck, I'm beating the S&P 500 this year - but only because I'm 2/3 in cash!

2008 Nov 02 01:19 PM

[notsosmart:]

these are funny articles.how these publications stay in business is beyond me.our whole society is based on pushing phony rated paper & lying.all have an agenda.think for yourself.somebody ought to chart how often these mags are wrong.now that would be a great chart.LOL

2008 Nov 03 11:29 AM