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How much passive investing is too much?
Warnings that index funds have broken the stock market all imply a threshold: a share of the market at which price discovery fails. Nobody making the argument names it. Owen Lamont, writing in the Financial Analysts Journal, argues that no such number exists short of complete passive ownership, and that what actually determines whether prices stay informative is who is left doing the trading. His case, the strongest peer-reviewed research against it, and what the performance
Robin Powell
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Terry Smith, Neil Woodford and the test Smith set for himself
In January 2020, Terry Smith told his investors why Neil Woodford had failed: the star manager changed his game. Five years on, Smith's own Fundsmith letter records the highest turnover in the fund's history and a new taste for momentum — and the way he explains it matches a pattern behavioural researchers have measured in fund managers' own words.
Robin Powell
Jul 158 min read
Fundsmith's underperformance, at 21 times the cost
Terry Smith built Fundsmith on a simple discipline: buy good companies and do nothing. Now, five years into trailing the market, he is turning over half his portfolio and paying more attention to momentum. The strategy that made his name is changing. The fee that came with it is not.
Robin Powell
Jul 93 min read
Is Terry Smith right to blame index funds for his struggles?
Terry Smith blames index funds for Fundsmith's five-year slump — but international market data, factor analysis, and 2024's high-dispersion conditions tell a different story. Here's what the evidence actually shows.
Robin Powell
Jan 156 min read
The Terry Smith timing trap: why most investors lost money
Terry Smith's Fundsmith beat the market for a decade, then trailed four straight years. £3.31bn fled in 2024. Most investors lost money vs a tracker. Why? Timing. They bought high after stellar returns, sold low during underperformance. Jack Bogle's iron law: money arrives after gains, leaves during losses. Even star managers can't beat that.
Robin Powell
Nov 3, 20256 min read
Is Terry Smith genuinely skilled or did he just get lucky?
Terry Smith's Fundsmith Equity fund has underperformed for four years, losing billions in outflows. But is this evidence of declining skill or simply bad luck? Academic research reveals it takes 36-800 years of data to statistically prove a fund manager has genuine talent rather than benefiting from chance. Smith's 14-year track record, despite early success, is statistically meaningless. His recent struggles with NVIDIA, Apple and Novo Nordisk may look like stock-picking err
TEBI
Jul 8, 20257 min read
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