Re: How many people are actually \"beating the market\"?
You provided some good resources in the last post. I agree that on the whole index management outperforms active management. However, like the Ibbotson article concludes, "the highest persistence is exhibited by funds whose alpha is greater than 10% and also by funds whose alpha ranks in the top 5% of the sample." A person does not have to invest in all mutual funds or a random mutual funds, I think it's realistic for someone to be able to do some research and pick one that is likely to outperform its benchmark.
I'm not going to argue your point on the possibility of negative survivorship bias in hedge funds. I was just bringing up a point and after a quick search I still have no idea how valid it is.
My main problems with a lot of these arguments is that people oversimplify things. Just because stocks are really complicated and often efficient doesn't mean the market is holely efficient. Most mutual funds and hedge funds do poorly, but talking about each industry as a whole isn't very productive.
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