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For those familiar with Lars Kroijer and his views

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For those familiar with Lars Kroijer and his views

edited 30 November -1 at 12:00AM in Savings & Investments
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JustAnotherSaverJustAnotherSaver Forumite
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edited 30 November -1 at 12:00AM in Savings & Investments
I've been meaning to ask this on here for some time now but keep failing to get round to it. There was a bit in the book that if i remember right i wanted to refer to but it looks like i've left the book at work. There was also a thread on here i saw within the last month or so that made me think of this even moreso but i've ended up leaving it that long that i can't find it now. Typical :rotfl:


Someone on here, i forget who, suggested i read the book, so i started & a lot of what he says seems to make sense to me. "Do you have an edge" gets repeated throughout. No i certainly do not is my answer.

A couple years ago i had another book suggested to me on here & Lars Kroijer seems to be basically echoing that one, or at least so far as i've read he seems to be echoing it.


The more i read it the more i agree that not only do i not have an edge but how do 99% of people have an edge? Likely they do not. They're either lucky or i don't know what.


Which brings me here. From reading in these forums, i could be wrong but it appears that the majority and not the minority believe they have an edge, certainly amongst the regular posters and it makes me wonder - why is that.


The other book i had (name of which i forget as i've loaned it out although i can try and get the title if it helps any) basically suggested cheap multi asset index trackers (i'm hoping i've got the correct term down there, i have a habit of not doing!) are the best way forward for the average Joe and that historically they outperform managed funds.

I think this is the point someone on here steps in and says absolutely everything is managed anyway. I don't know enough to argue that point but clearly that person must know what these others are on about when they refer to managed vs otherwise?
The Lars Kroijer Investing Demystified book i'm reading seems to be going down the same path, as far as i've read.



The thread on here that i referred to which was posted recently, many spoke of actively managed funds in their portfolio and how it is either totally actively managed or mostly actively managed. So when i'm reading that most people don't have this 'edge' that Lars Kroijer mentions in his book, i'm wondering ... how come most of the regulars on MSE actually do??


I understand that the responses to this are probably going to result in me questioning life itself and my mind will explode from the pushing and pulling - how people on both sides of the fence make sense and i don't know who's 'right' but what the hell. After reading the book i'm just curious on the stance from others.

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  • arwainarwain Forumite
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    I think for the vast majority of people the advice Kroijer provides in his book is spot on. Most people do not have the time or the interest to gain the necessary knowledge required to gain an edge in the financial markets.

    Several of the regular posters on this forum work in the financial industry or have a real passion for it and enjoy the research and hard work required to do better than investing in a tracking index fund.

    Was this the thread you had been reading recently?
    https://forums.moneysavingexpert.com/showthread.php?t=6023217&highlight=active+vs+passive
  • PrismPrism Forumite
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    I would say that most people would agree that most individuals do not have an edge. I don't see many people recommending investing directly in individual stocks on this forum, although some do.
    So what it boils down to is do any active fund managers have that edge, is the advantage still there after they deduct their fees and is it possible to select one of those fund managers ahead of time.
    I personally believe it is but the pool of funds and managers that fall into that category is pretty small.
  • AudaxerAudaxer Forumite
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    I don't think most people on here think they have an edge. It is just that a lot of investors think a portfolio of active funds, or a hybrid portfolio of active and passive funds, give them better diversification than just picking index funds or a multi asset fund. They may or may not produce better results long term.

    I'm more in the passive camp, although I think active funds are better if you are looking for an income portfolio of dividend generating funds. The other argument for actives is that they cover asset classes not adequately covered by index funds. However it is important getting the asset allocation correct and having a strategy that you can stick to with a disciplined approach.
  • bostonerimusbostonerimus Forumite
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    The mistake that people make is that they try to maximize the amount of money they might make rather than maximizing the probability that they will make enough to meet their financial goals. So the whole idea of “alpha” or getting on the positive side of the risk/return ratio can be dangerous to financial health
    Misanthrope in search of similar for mutual loathing
  • edited 11 August 2019 at 9:49PM
    ThrugelmirThrugelmir Forumite
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    edited 11 August 2019 at 9:49PM
    As an investor you'll never stop learning. Keep an open mind. Read, research, attend and listen. Perhaps you'll have inside knowledge of the industry you work in.

    There's a place for passive and active funds within a diversified portfolio. As there's a universe of investment opportunities out there.

    Suggest you read "Harriman's New Book of Investing Rules: The Do's and Don'ts of the World's Best Investors". A well balanced book that will open up your horizons.

    If everyone trod same road there'd be no market so to speak. As a private investor there'll be opportunities to exploit. Unearthing them is the art. Time and patience is a neccessity. As not a question of simply taking wild punts on speculative price movements.
    "The human understanding when it has once adopted an opinion ... draws all things else to support and agree with it." - Francis Bacon (1561 – 1626)
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  • edited 12 August 2019 at 6:56AM
    firestonefirestone Forumite
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    edited 12 August 2019 at 6:56AM
    is it not just a case of free will? - as in do i have an edge in trying to pick the winner of the 2.30 at Ascot or the correct score of the next Man City game no but i will still try.Do people have an edge in picking certain numbers in a lottery no but they still try.People will either believe Kroijer or they won't but you could say his edge is getting people to pay £15 for a book only to tell them to invest passive when Bostonerimus tells people everyday for free:)
    Also think the edge was mentioned in the book How To Own the World by Andrew Craig which had a section called "why you will do better then many professionals" basically saying the same thing that people could do better investing their own money (and then i believe launched a managed multi asset fund so maybe he did not agree with his book)
  • jsincjsinc Forumite
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    I agree with him, although don't entirely invest by it. Stolen from elsewhere but: "technically, alpha [excess return] is just an unexplained return in a regression". Unexplained means unattributable to one of skill or luck.
  • JustAnotherSaverJustAnotherSaver Forumite
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    arwain wrote: »
    The very one :)
    Thrugelmir wrote: »
    Suggest you read "Harriman's New Book of Investing Rules: The Do's and Don'ts of the World's Best Investors". A well balanced book that will open up your horizons.
    Or fry my brain (if it goes against what i've read so far) :rotfl:
    Problem is, i don't know enough and therefore am not confident enough to challenge views which leads me to accepting views .... all of them :rotfl:because everyone knows more than me, right?


    If everyone trod same road there'd be no market so to speak.
    Exactly what i was thinking. Then i thought maybe everyone is chasing the unlikely, like playing the lottery. Summed up by....
    The mistake that people make is that they try to maximize the amount of money they might make rather than maximizing the probability that they will make enough to meet their financial goals.
    firestone wrote: »
    (and then i believe launched a managed multi asset fund so maybe he did not agree with his book)
    Or saw a way to make money by milking people chasing a dream they're unlikely to get (such as in your lottery example - i also play it but i can afford to lose £1.50 per week).


    Note: I don't actually know who you're talking about.

  • ThrugelmirThrugelmir Forumite
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    The very one :)
    Or fry my brain (if it goes against what i've read so far) :rotfl:
    Problem is, i don't know enough and therefore am not confident enough to challenge views which leads me to accepting views .... all of them :rotfl:because everyone knows more than me, right?

    The book is very readable. Short chapters that can be digested one by one. Not simply a debate between the merits of passive vs active either. Far far broader.

    Starting out keep it simple. As the amount invested grows to a sizable sum. Then start branching out.

    First rule of investing is don't lose capital.
    Second rule is don't forget rule no 1.
    "The human understanding when it has once adopted an opinion ... draws all things else to support and agree with it." - Francis Bacon (1561 – 1626)
  • firestonefirestone Forumite
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    The very one :)
    Or fry my brain (if it goes against what i've read so far) :rotfl:
    Problem is, i don't know enough and therefore am not confident enough to challenge views which leads me to accepting views .... all of them :rotfl:because everyone knows more than me, right?




    Exactly what i was thinking. Then i thought maybe everyone is chasing the unlikely, like playing the lottery. Summed up by....
    Or saw a way to make money by milking people chasing a dream they're unlikely to get (such as in your lottery example - i also play it but i can afford to lose £1.50 per week).


    Note: I don't actually know who you're talking about.
    Andrew Craig the author of How To Own The World :)
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