Re: Evaluating Managed Funds
[ QUOTE ]
is there still positive alpha after evaluating on the 3-factor model?
[/ QUOTE ]
The idea that Buffett and the rest of the SuperInvestors are crushing the markets solely because of their higher exposure to small caps and value stocks is kind of silly. You might get an extra 1-2% of annual outperformance that way, not 10-15%.
The key characteristics that these investors have are great judgment and patience. A secondary characteristic is that most eschew running mutual funds, which are structured to sap performance. Those who do run mutual funds usually do so intelligently, i.e. they close before they get too big, which eliminates some of the handicaps.
|