19-10-2014, 11:47 PM
DFA kept appearing as one of the institutional shareholders when I looked for more info on some of the popular counters in VB. Examples are Penguin, CMP. I decided to find out more about them. While I do not really understand their method, I am totally impressed with the qualification of their management ( Nobel winners, PhD, Rocket Scientist ).
http://online.barrons.com/news/articles/...2021894432
Excerpt:
"With 3,000-plus active managers, some are going to look good -- but that's what you'd expect as a matter of chance," he says. "It's very difficult to tell luck from skill." Even to the extent that skill is involved, stock-picking is not a repeatable process with the consistency and persistence of returns that would enable investors to anticipate which managers are likely to outperform -- especially given the cost of making those bets. "Active management is a zero-sum game, and that's before costs," Fama says. "That's not opinion. That's math."
http://online.barrons.com/news/articles/...2021894432
Excerpt:
"With 3,000-plus active managers, some are going to look good -- but that's what you'd expect as a matter of chance," he says. "It's very difficult to tell luck from skill." Even to the extent that skill is involved, stock-picking is not a repeatable process with the consistency and persistence of returns that would enable investors to anticipate which managers are likely to outperform -- especially given the cost of making those bets. "Active management is a zero-sum game, and that's before costs," Fama says. "That's not opinion. That's math."
