From: Norman Wells 
Newsgroups: misc.invest.stocks uk.finance misc.invest.mutual-funds
Subject: Re: Why Managed Funds are Bad for your Wealth
Date: Wed, 27 Jun 2007 23:02:23 +0100
Bytes: 4582

In message <5efut2F3773s5U1@mid.individual.net>, Andy Pandy 
 writes
>
>"Norman Wells"  wrote in message
>news:kohj57E51rgGFw1R@myard.demon.co.uk...
>> >> >Same with Fidelity, as demonstrated in that post above that you
>are
>> >ignoring
>> >> >:-) 58% of their managed funds beat the S&P500 index funds over
>10
>> >years.
>> >>
>> >> Congratulations then on guessing right.
>> >>
>> >> But it's still not a great advertisement is it?  Even if they
>picked
>> >> shares with a pin, 50% of their funds would beat the index over
>any
>> >> period.
>> >
>> >Really? Not 27% then, as you claim is the average?
>>
>> If you'd been following the argument, you'd know that the 27% figure
>is
>> after deducting the management charges that managed funds impose.
>It's
>> obviously 50% before charges if shares are selected at random.
>
>So where does it say that 58% figure was before charges??

It doesn't.  It doesn't say that it's after charges either.  We just 
don't know, just like we don't know a lot else about how that figure is 
derived, as I've pointed out before.

>> >> 1.  A quote from http://www.moneysorter.co.uk/tracker_funds.html
>> >>
>> >> "As the Buddha of the small investor, Warren Buffet, said
>> >>
>> >> "Most investors, both institutional and individual, will find
>that
>> >the
>> >> best way to own common stocks is through an index fund that
>charges
>> >> minimal fees. Those following this path are sure to beat the net
>> >results
>> >> (after fees and expenses) delivered by the great majority of
>> >investment
>> >> professionals."
>> >
>> >Great majority. Not all.
>>
>> Indeed.  A 'great majority' is actually rather more than 73%, I'd
>have
>> said.
>
>So that contradicts your 73% figure then.

No, it just increases it, making your case even worse than it is.
>
>> Where would you pitch it?
>
>I don't care. I choose from the minority which consistently beat the
>relevant index.

Congratulations on being lucky.

Haven't I said that before?
>> >
>> >> 3.  A quote from Motley Fool at
>> >>
>>
>>http://www.fool.co.uk/isas/information/index-trackers-managed-funds.a
>spx
>> >>
>> >> "9 out of 10 managed funds don't manage to beat the index over
>the
>> >> long-term. Yes, you did read that correctly -- 9 out of 10!"
>> >
>> >There is some bullshit on the Motley Fool site. Doesn't really
>> >correlate with the rest of your quotes.
>>
>> No, it makes mine look positively conservative by comparison.
>
>So which is it then?

You pays your money, you takes your choice.  Either figure 
comprehensively supports my view not yours.  Which do you prefer?

-- 
Norman Wells
NG