Quote

Throughout the universe of public and private funds, managers are measured quarterly against one index or another, defined by statistics, and corralled into this category or that category so that fund of funds, pensions, and other institutions can make comforting - if not necessarily prudent - asset allocation decisions.

— Michael Burry

Sentiment: NEGATIVE

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✓Similar Perspectives

Mutual fund managers want your money in their funds. They get paid based on assets under management.

— Barry Ritholtz

The objective of the customer is not being met if the fund managers are diversifying their assets into hundreds of businesses. If they do this, they are typically performing close to the indexes. But that's not the way wealth is created.

— Michael Lee-Chin

I'm making a case against how money managers are handling customers' money. The objective of the customer is not being met if the fund managers are diversifying their assets into hundreds of businesses. If they do this, they are typically performing close to the indexes. But that's not the way wealth is created.

— Michael Lee-Chin

Often, investors will discover a manager after he's had a terrific run, usually when he lands on a magazine cover somewhere. Invariably, funds swell up with new investor money just before they revert to their long-term averages.

— Barry Ritholtz

A hedge fund manager whose clients demand monthly performance reports has different needs than any individual investors with a 20-year time horizon. The needs of that long-term investor differ markedly from someone who is retiring in three years.

— Barry Ritholtz

After costs, only the top 3% of managers produce a return that indicates they have sufficient skill to just cover their costs, which means that going forward, and despite extraordinary past returns, even the top performers are expected to be only as good as a low-cost passive index fund. The other 97% can be expected to do worse.

— Eugene Fama

Investors tend to discover 'hot' mutual fund managers just after a successful run and just before the inescapable force of mean reversion is about to kick in.

— Barry Ritholtz

I see good personal financial management as setting - and keeping - a budget.

— John Rampton

Be true to yourself, and, um, don't worry about some large companies' quarterly profit index.

— Natalie Merchant

✗Opposing Perspectives

Mutual funds dare to be average. In fact, they dare to be lousy. They have long since ceased striving for anything resembling perfection when it comes to managing your money.

— Gary Weiss