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Re:Insider trading has been rife on Wall Street, academics c... by ch4s3 on Sunday February 11, 2018 @03:22PM (#16354570)
>People who deeply understand the companies in their portfolio will generally outperform the market at large by finding and exploiting mismatches in the market (i.e. active management)

There is no evidence that I'm aware of suggesting that active management "generally' outperforms the market. In fact, most evidence points to the majority of active managers performing worse than the market in the long run.

Re:Insider trading has been rife on Wall Street, academics c... by madengr on Sunday February 11, 2018 @04:04PM (#16354792)
Agree. Once the management fees are considered, you don’t come out any better than an index fund. At least that’s the conclusion in A Random Walk Down Wall Street.

Reminds me of John Stossel throwing darts into the newspaper stock section, and doing just as well as managed funds.

Re:Insider trading has been rife on Wall Street, academics c... by pedrocr on Sunday February 11, 2018 @04:46PM (#16355005)
In aggregate it's mathematically impossible for active management to outperform the market:

https://web.stanford.edu/~wfsharpe/art/active/active.htm

For every smart active manager that beats the index someone else is on the other side of the bet losing.

Re:Insider trading has been rife on Wall Street, academics c... by rphlx on Monday February 12, 2018 @08:40PM (#16364075)
Note though that once the market is majority passive - which seems likely within the next decade - it actually is theoretically possible for active to slightly outperform passive.
Re:Insider trading has been rife on Wall Street, academics c... by ch4s3 on Sunday February 11, 2018 @09:36PM (#16356141)
That's pretty much my point.
Re:Insider trading has been rife on Wall Street, academics c... by pedrocr on Monday February 12, 2018 @04:46AM (#16357619)
I was reinforcing that it wasn't a matter of "evidence" it's just impossible.