Jesse Bridgewater's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/144524/comments http://seekingalpha.com/article/112444-clean-energy-mutual-funds-etfs-does-active-management-pay?source=feed#comment-340752 340752
I do have one bit of feedback about the statistical significance testing that you are performing.

If I understand your setup comparing the active and passive global funds, you have two samples with sizes 5 and 2. Using a t-test with these sizes is aggressive especially without more info about the underlying distribution. You definitely want much larger samples for using a z-test since it relies on the central limit theorem.

Unfortunately with these small samples we can't relay on statistics to help us decide between active or passive investing.

One way to attack the problem might be to look at index sub-samples as proxies for active investment strategies. The one could simulate many possible portfolios and see how many of them beat the indexes.

Thanks for the thought-provoking article.

Jesse Bridgewater]]> Mon, 29 Dec 2008 14:37:23 -0500
I do have one bit of feedback about the statistical significance testing that you are performing.

If I understand your setup comparing the active and passive global funds, you have two samples with sizes 5 and 2. Using a t-test with these sizes is aggressive especially without more info about the underlying distribution. You definitely want much larger samples for using a z-test since it relies on the central limit theorem.

Unfortunately with these small samples we can't relay on statistics to help us decide between active or passive investing.

One way to attack the problem might be to look at index sub-samples as proxies for active investment strategies. The one could simulate many possible portfolios and see how many of them beat the indexes.

Thanks for the thought-provoking article.

Jesse Bridgewater]]> http://seekingalpha.com/article/15251-why-you-shouldn-t-own-dia-spy-or-qqqq?source=feed#comment-124722 124722 Mon, 10 Mar 2008 12:35:13 -0400 http://seekingalpha.com/article/15251-why-you-shouldn-t-own-dia-spy-or-qqqq?source=feed#comment-123986 123986
The article state that one should prefer the less liquid IVV over the more liquid SPY because of the better expenses for long-term investing.
As of 3/8/2008 this claim appears to be wrong.
SPY 0.08
IVV 0.09

According to Yahoo! Finance.
finance.yahoo.com/etf/...]]> Sat, 08 Mar 2008 13:41:54 -0500
The article state that one should prefer the less liquid IVV over the more liquid SPY because of the better expenses for long-term investing.
As of 3/8/2008 this claim appears to be wrong.
SPY 0.08
IVV 0.09

According to Yahoo! Finance.
finance.yahoo.com/etf/...]]>