New S&P Study: Most Fund Managers Fail to Beat Market

Add a new piece of evidence to the notion that most active fund managers fail to beat their benchmark indices over the long haul: According to recently released data from Standard & Poor’s, over the five years ending June 2008, the S&P 500 outperformed 68.6% of actively managed large cap funds; the S&P MidCap 400 outperformed 75.9% of mid-cap funds; and the S&P SmallCap 600 outperformed 77.8% of small cap funds. The data comes from S&P’s mid-year 2008 S&P Indices Versus Active Funds (SPIVA) Scorecard, which examines more than 3,500 unique fund portfolios, and, importantly, adjusts for survivorship; that is, […]

Painful Stretch Even for The Greats

No one beats the market all the time — not even the best investors in history — and this difficult bear market has been a perfect example. Yahoo Tech Ticker’s Aaron Task reports that many investors with exceptional long-term track records have (along with just about everyone else) been hit hard. A look at some top money managers’ year-to-date performances: * Warren Buffett (Berkshire Hathaway): -43% * Ken Heebner (CMG Focus Fund) -56% * Harry Lange (Fidelity Magellan): -59% * Bill Miller (Legg Mason Value Trust) -50% * Ken Griffin (Citadel): -44% * Carl Icahn (Icahn Enterprises): -81% * T. […]

Billions in Derivatives Losses Looming for Buffett, Berkshire?

Investment author Jon Markman says in his Nov. 19 “Trader’s Advantage” newsletter that the losses Warren Buffett and Berkshire Hathaway have recently incurred because of the plummeting market may be only the start of their problems. “If you want to talk about problems that are not fully discounted by the market yet, let me just throw one bombshell out there. … What if Berkshire Hathaway, the most respected insurance company in the world, were to suffer a large loss on derivatives, much like American International Group did?” Markman, a former financial reporter and columnist who wrote for the L.A. Times, […]

History Rhymes — But Do We Learn from It?

Robert F. Bruner, dean of the University of Virginia’s Graduate School of Business and author of The Panic of 1907: Lessons Learned from the Market’s Perfect Storm, writes on Forbes.com that the current financial crisis shares a number of attributes with past economic and market crises. But, he asks, “does the recurrence of crises actually mean we’ve learned little from them? More important, what can we learn from them?” Bruner says that the current crisis differs from those of the past because of its greater complexity, inflexibility, speed, and scale, and he suggests four lessons we can take from those […]

Zweig: Joe Investor’s Time Is Now

Wall Street Journal columnist Jason Zweig makes the current case for the individual investor, and highlights the vast array of asset classes that are presenting very attractive values. While stocks are cheap, other areas such as corporate and municipal bonds, emerging markets, TIPS, real estate and closed-end funds are also so beaten up that opportunities abound.