Evaluating Managed Funds

[DesertCat]

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P.S. Didn't W. Buffett say that most investors would be better off in index funds during a shareholder letter in the 90s?

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Yes, Warren Buffett is well aware of the poor performance of most fund managers, and that is why he's advised the average investor to choose index funds. But the point of his "Superinvestors of Graham & Doddsville" is that while the market is frequently efficient, it's consistantly beatable by a smart investor. His example investors didn't squeak by the indexes either, most of them crushed the indexes and did so taking substantially less (real) risk.

Of course I'm not sure how Buffett beat the market since he believes the CAPM is pure BS, and that Beta has nothing to do with risk. He's just an old fuddy duddy so out of touch with these smart academic types that he's content with a 50 year record averaging north of 25% a year....