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Active Management

Active Management. Why believe in active management? Many arguments against it: Efficient markets hypothesis and accompanying academic studies. Active managers face headwind of transactions costs, fees, taxes, etc. Bill Sharpe’s arithmetic of active management.

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Active Management

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  1. Active Management • Why believe in active management? • Many arguments against it: • Efficient markets hypothesis and accompanying academic studies. • Active managers face headwind of transactions costs, fees, taxes, etc. • Bill Sharpe’s arithmetic of active management. • Index funds consistently perform above the median. • Arguments for active management: • Shiller’s excess volatility. • Behavioral finance. • Warren Buffett, Bill Miller…

  2. Our perspective • Active management is possible • But it isn’t easy. • Consistent success requires the art of seeing what others miss. • But it also requires the science of optimally investing based on those ideas. • We can offer a process. • Not a guarantee of success.

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