since about 10 people have read the response I gave you I will fill in the answers for their benefit.
Hi Grob, Your only substantive critique as far as I can tell is that I answered a different question than malaka asked. That's strange to me given that the title of the thread is: "why do funds perform so poorly?" And my paraphrase of his post: "malaka56 asks, in essence, why can't all institutional investors earn fantastic market beating returns." Can you describe in precise terms how the question I answered is fundamentally different from the one malaka raised in this thread? Your attempt to paraphrase my post utterly misses the point, as does your Vanguard case study. Even if you secretly understand my argument, you still haven't rebutted it. Please, read Sharpe's paper, as it goes into more detail than I can here. If you still don't understand, ask again and I'll try to explain it more clearly. I've never heard of "Bogle on Bogle," but I did read "Bogle on Mutual Funds" years and years ago, and I am quite familiar with his philosophy. I find it strange that you would invoke Bogle to contradict my argument. My argument (Sharpe's argument, really) is the intellectual foundation of the low cost index fund industry. Bogle is the pioneering businessman and standard bearer for that industry. They really couldn't possibly be better aligned. So please, explain for me, how exactly does Bogle disagree with me? Martin
thanks for reading my response. I'll pass on the rest. Maybe Hydro can help you out. Bogle on Bogle is the euph for his book
Q http://www.collective2.com/cgi-perl...x&tablename=newsearch&numrecs=897&showfilter= SYSTEM => SHARPE => RETURN Dr.Forex => 0.54 => 156.40% Hawk-fx => 0.64 => 113.60% Koan2EURUSD => 0.8 => 112.30% VortexIIForex => 0.97 => 91.80% SARF2! => 0.54 => 73.40% UQ Probably the Sharpe values in the top 5 systems above would be the main reason for them Not to launch their hedge funds, Yet.
Perhaps there would be a possibility of market demands that expect much more on risk (MaxDD), consistency (HighSharpe) and MAR (Minimum Acceptable Return), rather than simply ROI (Max%). For attracting funding purpose, probably managers would have to adjust their styles in order to meet market expectations. Just my 2 cents.
Great answers you guys. I am a newbie and I make no claims to understand the markets, but I fully enjoy reading more experienced people debate their views, opinions, and relate their experiences. Quite interesting. I agree, it would be very interesting to see a study correlating capital size with diminished returns. These factors seem to play a huge role in equities, but in gigantic markets like FX, I would think you would need to be moving some serious money to have liquidity issies.
Dude, once again, I never said I disagree with the math behind it. You're just helping me prove my point, in a slightly more complicated manner. It's just common sense, the majority must lose for the minority to win. Did you really need Stanford to even try to figure that one out?
"areyoukidding? Registered: Feb 2004 Posts: 1429 10-21-05 01:13 PM Quote from areyoukidding?: they are not scalping. they are trying to earn fees. this is a fee based business, just like wall street. enough already." congratulations you have found your best audience. i am surprised that you didn't PMed your own post