#SFTW: Something for the Easter weekend
Posted by Robin Powell on March 24, 2016
Blogging is hard. Why do it?
One of my fellow bloggers I most admire is Barry Ritholtz. When I visited Barry at his New York office a few months ago, I was astonished to hear him say that he usually starts researching his posts at 4.30 am. He then goes on to do a full day’s work — not just on his blog, The Big Picture, but also on running his growing advisory firm.
It does, of course, raise the obvious question, Why does he do it? Why spend all that time and effort producing high-quality content and then publishing it for free?
Barry recently answered that very question in a post entitled Inverting Wall Street’s Research Business Model. In it he explains how he’s building his entire business on education, on explaining to people how the industry works, and how they can enjoy a successful investment experience despite the industry.
Nul points for Europe’s fund managers..
TEBI readers in Europe may want to skip to the third paragraph, but for those elsewhere in the world, I ought to provide some background information.
On a Saturday night each May, this great continent of ours, the cradle of western civilisation, closes down for a giant celebration of kitsch, called the Eurovision Song Contest. The songs are often out of tune, the lyrics dreadful, the dance routines even worse. The Eastern Europeans all vote for each other; and the UK, the nation that gave the world the Beatles, frequently comes in last.
I must say I thought of Eurovision when reading the the results of the newly released Europe S&P Indices Versus Active Funds (SPIVA) Scorecard for 2015. SPIVA has been the go-to scorekeeper for active fund performance for 14 years now, measuring funds against their relevant benchmark. But this is the first time that European fund managers have had their performance compared to that of their counterparts in countries across the continent.
Is you fund manager too posh?
A new study of asset managers in the United States has found that managers from less well-to-do families often tend to outperform their wealthier colleagues.
Oleg Chuprinin of University of New South Wales and Denis Sosyura of University of Michigan used hand-collected census data on the households in which managers grew up in order to measure how family background relates to their performance.
Perhaps unsurprisingly they found that fund managers, as a group, come from the wealthier echelons of society. Their fathers’ incomes are in the 90th percentile, they grew up in houses worth double the local average and were more likely to attend private schools and expensive universities.
But, the researchers found, fund managers from families in the top 20% of parental income underperformed those from the bottom 20% by 1.54% a year, on a risk-adjusted basis.
Other TEBI posts you may have missed..
Evidence-Based Investing Insights..
This is a four-part series of videos we produced for Independence Advisors in Pennsylvania, setting out the key principles underpinning evidence-based investing.
If you’ve found these videos helpful please do share them, and if you’re an adviser who shares the evidence-based investing approach, you may be interested to know that Regis Media can provide you with a separate version of this series carrying your own company’s branding and contact details.
Also worth reading..
How to create a perfect “forecast” (Jeff Miller)
The same old fears never really go away (Josh Brown)
Warren Buffett on booms, bubbles and busts (Morgan Housel)
The fight and lies against the Fiduciary Rule (James Osborne)
If not evidence-based, what sort of adviser are you? (Bob Seawright)
1 in 4 Americans have almost nothing saved for retirement (Katie Lobosco)
Low expenses the biggest trend in the fund industry, experts say (John Waggoner)
Funds have a much lower Active Share today than 30 years ago (Patrick O’Shaughnessy)
Preparing for the reaper — one year on (Monevator)
Risk premiums are worth capturing, but don’t try to time it (Larry Swedroe)
Whatever you’re doing over the weekend, have a safe and happy Easter.