Saturday, November 26, 2016

Greensboro's City Council must have been too stupid to figure it out

Bill Miller; "As much as seven in 10 supposedly "active" fund managers are in fact high-priced closet indexers"

"Rules they must follow at their firms make risk-taking impossible, Miller says. And it's only by taking outsized risks that one can hope to beat the market, he says...

The Community Foundation's Walker Sanders is too greedy
to understand what he should for the benefit of his investors
like Say Yes Guilford and the Performing Arts Center endowments

For too many supposedly active funds, that level of risk is just unacceptable. Managers just aren't rewarded for it, and job preservation is their primary motivator.

Job preservation is/was Connie Hammond, Rick Lusk and Jim Westmoreland's
motivating factor, when they screwed City of Greensboro's employees
by keeping the fund costs high in the City's ICMA-RC retirement fund's clear why eight out of 10 active funds fail to beat their index after fees. They have no incentive to take on the kind of volatility necessary to make up that lost ground and succeed.

So mayor Nancy Vaughan let ICMA keep shafting her employees
and she didn't understand what happened, or she just doesn't give a shit

Miller believes that the move to so-called passive investing from active not from active to passive, Miller argues, but from high-cost passive investing (the theoretically active funds) to low-cost passive investing (index funds).

One of these two options is going to come pretty darn close to its benchmark year after year. One of them just isn't, and people are figuring that out.

Because of the high costs Tony Wilkins