Telegraph article-bond funds..

jamesd

We have. Do you think you can outperform? Do you think fund managers can outperform? If the answers are different, you have a logic problem wrong answer to correct: either humans can outperform or they can't.

slinga

Funny thing is a couple of the funds recommended in that article have only been going for about a year, so no long term basis for their inclusion, imo.

gadgetmind

jamesd wrote: »

Do you think you can outperform?

In my very very narrow sector, yes, generally, no.

However, even for general investing, I do benefit from very low fees, and a multi-assets/sector/territory approach with rebalancing, which all helps. However, I do benchmark myself again some other similar funds, and if I can't prove to myself (which is hard!) that I can beat them, then I'll stop putting in the hard work.

Do you think fund managers can outperform?

History would suggest that some can but we lack the tools to establish which ones other than after the fact. The rest cannot beat the market (many seem to have stopped trying and just "closet track") and pocket the fees.

If the answers are different, you have a logic problem wrong answer to correct: either humans can outperform or they can't.

Whether managers can outperform is a different matter to whether an investor can benefit from it.

grey_gym_sock

if you can outperform, the next question could be: what is your effective hourly pay rate for active investing, i.e. extra £ made divided by extra hours spent on investing (compared to a passive benchmark)?

jamesd

gadgetmind wrote: »

In my very very narrow sector, yes, generally, no.

So if you were to become a fund manager in that narrow sector could you continue to beat the index?

gadgetmind

jamesd wrote: »

So if you were to become a fund manager in that narrow sector could you continue to beat the index?

No, probably not because of the problems that face managers of open-ended funds in niche areas.

gadgetmind

grey_gym_sock wrote: »

if you can outperform, the next question could be: what is your effective hourly pay rate for active investing, i.e. extra £ made divided by extra hours spent on investing (compared to a passive benchmark)?

Well, yes, but the sad fact is that I actually enjoy the intellectual side of investing. I also have to read hundreds of patents as part of my job (and write a few too) so might as well get some side benefit!

However, after finding myself with over 50% of my investments in just a couple of companies, I scared myself a little and now try and keep my "sandpit" to below 10% with a target of 5%.

jamesd

gadgetmind wrote: »

I also have to read hundreds of patents as part of my job (and write a few too)

You have my sympathy!

gadgetmind wrote: »

However, after finding myself with over 50% of my investments in just a couple of companies, I scared myself a little and now try and keep my "sandpit" to below 10% with a target of 5%.

I'm glad you scared yourself before that blew up in your face, as it surely would have sometime.

gadgetmind

jamesd wrote: »

I'm glad you scared yourself before that blew up in your face, as it surely would have sometime.

It would have been easy-come-easy-go as one of my larger investments increased 40x, which was the root cause of the "problem". However, after a few years of heavy-duty diversification, things are looking better.

Another "problem" has been partly addressed by some changes to entrepreneur's relief, but due to volatility, I'd actually have been better selling earlier and taking the 28% CGT hit!

jamesd

LOL, yes I'd say that a 40x gain is a good problem to have.