Since learning about the concept of the Baltimore Stockbroker, I'm thinking that actively managed funds as a concept are horseshit. http://www.theguardian.com/

Since learning about the concept of the Baltimore Stockbroker, I'm thinking that actively managed funds as a concept are horseshit. http://www.theguardian.com/books/2014/jun/13/how-not-to-be-wrong-hidden-maths-jordan-ellenberg-review http://www.theguardian.com/books/2014/jun/13/how-not-to-be-w... >Here's a cautionary tale. A broker sends you 10 free stockmarket predictions in a row that all come true, and then asks for money for an 11th. The stockbroker's offer seems reasonable enough. His strike rate is 10 out of 10, so surely he will be right the next time, too? Don't do it! If you pay for the 11th tip, you will have fallen victim to the oldest scam in the book. Unknown to you, the stockbroker has been sending every combination of possible predictions to tens of thousands of other people, and you are one of the unlucky few who got 10 good ones in a row. >Imagine you are considering investing in a mutual fund. Before funds are opened up to the public, they are often monitored in-house. Funds that don't perform well can be shut down, without the public ever knowing. Ellenberg warns that if you are seduced by funds with an eye-popping rate of return, then you are walking into the Baltimore stockbroker's trap: "You've been swayed by the impressive results, but you don't know how many chances the broker had to get those results."