The Evidence-Based Investor

#SFTW: Something for the Easter weekend

Posted by Robin Powell on March 24, 2016

Blogging is hard. Why do it?

One of my fellow bloggers I most admire is Barry Ritholtz. When I visited Barry at his New York office a few months ago, I was astonished to hear him say that he usually starts researching his posts at 4.30 am. He then goes on to do a full day’s work — not just on his blog, The Big Picture, but also on running his growing advisory firm.

It does, of course, raise the obvious question, Why does he do it? Why spend all that time and effort producing high-quality content and then publishing it for free?

Barry recently answered that very question in a post entitled Inverting Wall Street’s Research Business Model. In it he explains how he’s building his entire business on education, on explaining to people how the industry works, and how they can enjoy a successful investment experience despite the industry.

Read the article here


Nul points for Europe’s fund managers..

TEBI readers in Europe may want to skip to the third paragraph, but for those elsewhere in the world, I ought to provide some background information.

On a Saturday night each May, this great continent of ours, the cradle of western civilisation, closes down for a giant celebration of kitsch, called the Eurovision Song Contest. The songs are often out of tune, the lyrics dreadful, the dance routines even worse. The Eastern Europeans all vote for each other; and the UK, the nation that gave the world the Beatles, frequently comes in last.

I must say I thought of Eurovision when reading the the results of the newly released Europe S&P Indices Versus Active Funds (SPIVA) Scorecard for 2015. SPIVA has been the go-to scorekeeper for active fund performance for 14 years now, measuring funds against their relevant benchmark. But this is the first time that European fund managers have had their performance compared to that of their counterparts in countries across the continent.

Read the article here


Is you fund manager too posh?

A new study of asset managers in the United States has found that managers from less well-to-do families often tend to outperform their wealthier colleagues.

Oleg Chuprinin of University of New South Wales and Denis Sosyura of University of Michigan used hand-collected census data on the households in which managers grew up in order to measure how family background relates to their performance.

Perhaps unsurprisingly they found that fund managers, as a group, come from the wealthier echelons of society. Their fathers’ incomes are in the 90th percentile, they grew up in houses worth double the local average and were more likely to attend private schools and expensive universities.

But, the researchers found, fund managers from families in the top 20% of parental income underperformed those from the bottom 20% by 1.54% a year, on a risk-adjusted basis.

Read the article here


Other TEBI posts you may have missed..

We have organic food. Why not organic finance?

Investment industry reform is not a party political issue

Learn to love your future self


Evidence-Based Investing Insights..

This is a four-part series of videos we produced for Independence Advisors in Pennsylvania, setting out the key principles underpinning evidence-based investing.

If you’ve found these videos helpful please do share them, and if you’re an adviser who shares the evidence-based investing approach, you may be interested to know that Regis Media can provide you with a separate version of this series carrying your own company’s branding and contact details.

Evidence-Based Investing Insights – Video 1/4: Market Pricing

Evidence-Based Investing Insights – Video 2/4: Diversity

Evidence-Based Investing Insights – Video 3/4: Return Factors

Evidence-Based Investing Insights – Video 4/4: Behaviour


Also worth reading..

The industry:

How to create a perfect “forecast” (Jeff Miller)

The same old fears never really go away (Josh Brown)

Warren Buffett on booms, bubbles and busts (Morgan Housel)

The fight and lies against the Fiduciary Rule (James Osborne)

If not evidence-based, what sort of adviser are you? (Bob Seawright)

1 in 4 Americans have almost nothing saved for retirement (Katie Lobosco)

Low expenses the biggest trend in the fund industry, experts say (John Waggoner)

Funds have a much lower Active Share today than 30 years ago (Patrick O’Shaughnessy)

Survey shows women feel disconnected from the financial services industry (Vanessa McGrady)


Sensible investing:

Preparing for the reaper — one year on (Monevator)

“Stick to big, broad and boring ETFs with ultra-low fees” (Allan Roth)

What are the benefits of combining value with momentum? (Jack Vogel)

Risk premiums are worth capturing, but don’t try to time it (Larry Swedroe)

When stocks fall, they become safer, even if they feel riskier (Jason Zweig)

When nothing’s happening in the markets, don’t try to force it (Ben Carlson)


And finally..

Whatever you’re doing over the weekend, have a safe and happy Easter.

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Robin Powell

Robin is a journalist and campaigner for positive change in global investing. He runs Regis Media, a niche provider of content marketing for financial advice firms with an evidence-based investment philosophy. He also works as a consultant to other disruptive firms in the investing sector. Regis Media.

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