Stock-Pickers Know How to Buy, But Not Sell

Most money managers are better at buying than selling, according to an article by Bloomberg columnist Barry Ritholtz. This is the conclusion of a report published in January that concludes: “While investors display clear skill in buying, their selling decisions underperform substantially –even relative to strategies involving no skill such as randomly selling existing positions—in terms of both benchmark-adjusted and risk-adjusted returns.” According to Ritholtz, the paper’s most surprising conclusion is this: “Fund managers would… Read More

Stock-Pickers Beware: Bots Are Here

BlackRock’s March announcement that the firm had reduced its staff of stock pickers to increase its focus on quant strategies may support the consensus that “active management is dying,” but Bloomberg columnist Nir Kaissar argues that “the problem is not that active managers fail to outperform the market; it’s that they keep that outperformance for themselves through high fees.” “Smart beta” index funds, on the other hand, have been able to beat the market at… Read More