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"A report this past week from investment firm Sanford C. Bernstein, titled “The Silent Road to Serfdom: Why Passive Investing Is Worse than Marxism,” warned tha

"A report this past week from investment firm Sanford C. Bernstein, titled “The Silent Road to Serfdom: Why Passive Investing Is Worse than Marxism,” warned that..." It would be funny if it wasn't so incredibly blatant.

mathattack 10y ago
A friend worked there as an investment advisor and wound up quitting because so many of their funds were losing to the market.
- partiallypro 10y ago
  Funny enough, index funds outperform hedge funds, etc, however you can outperform the indices by buying stock at 3:00-3:30pm and selling at 4:00pm every day, because that's when many funds vest, and when most of the daily volume occurs. It's a horrible irony. The "3:30 Ramp" is so well known that there's a Twitter parody account followed by huge swaths of "Finance Twitter."
  - analog31 10y ago
    Is it enough to cover the typical discount broker commission?
    - hkmurakami 10y ago
      That would depend on your trading volume.
  - btown 10y ago
    https://twitter.com/RampCapitalLLC https://twitter.com/RampCapitalLLC http://www.zerohedge.com/news/2013-04-08/invest-330-pm-ramp-capital-lp-266-annualized-outperformance http://www.zerohedge.com/news/2013-04-08/invest-330-pm-ramp-... I barely know anything about trading, and nonetheless this is absolutely glorious. It's grown into a subculture that rivals any subreddit, with its own set of memes, photoshops, even animations. And to listen to the ever-bullish narrator, there's no end in sight to the ramp...
  - dsacco 10y ago
    >> Funny enough, index funds outperform hedge funds, etc I'm weary of reading this on Hacker News. Index funds do not beat hedge funds. That statement is devoid of nuance and accuracy, and contributes to a narrative that active managers do not have a skillset or function. Most hedge funds do not maintain performance that beats the market, but many do. This is easily verifiable.
    - fauigerzigerk 10y ago
      >Most hedge funds do not maintain performance that beats the market, but many do. This is easily verifiable. Yes, it's easily verifiable. It's also completely meaningless without a rational way to predict which ones will be outperforming in the future.
      - dsacco 10y ago
        It's not at all meaningless, because it is rational to use past performance as a predictor of future performance. Past performance does not necessarily indicate future performance, and it should not be the only predictor, but to dismiss a fund's history as inconsequential to its future is silly. A fund's prior performance is a useful signal that can be rationally incorporated into a risk versus reward decision process.
        fauigerzigerk 10y ago
        >Past performance does not necessarily indicate future performance, and it should not be the only predictor, but to dismiss a fund's history as inconsequential to its future is silly. I'm not dismissing it unconditionally, but I'm not going to believe it unless I see the data. What's the probability of a fund outperforming given it has outperformed the year before?
        j1o1h1n 10y ago
        If it has been doing it for three of the last four years, good. If it has been doing it for five of the last seven years, dodgy. IANACFA
  - pakitan 10y ago
    I don't see how this can be a viable strategy, if the effect is so well known. These things only work as long as few people are aware of the pattern.
- prostoalex 10y ago
  Why not choose the 3 or 4 that happened to perform well and buy a full-page ad featuring them in Wall Street Journal, Money and Kiplinger's, the way every other fund company had done?
fullshark 10y ago
Wow I thought you were joking about that book title
- nine_k 10y ago
  Poe's Law.
themartorana 10y ago
Wooooow. It's always funny/concerning when people who make money by taking advantage of others by leveraging their lack of education then start acting as though fixes to that imbalance are afronts to their earned/deserved position. Although, when any industry changes, those that stand to lose always put up a fight. Everyone thinks everything they have is deserved or owed to them.
unimpressive 10y ago
I disagree, it's funny because it's so incredibly blatant.
andrepd 10y ago
"The tone of the report was a little operatic, but the question it raised is deadly serious."
majewsky 10y ago
> Why Passive Investing is Worse than Hitler

mathattack 10y ago

A friend worked there as an investment advisor and wound up quitting because so many of their funds were losing to the market.

partiallypro 10y ago
Funny enough, index funds outperform hedge funds, etc, however you can outperform the indices by buying stock at 3:00-3:30pm and selling at 4:00pm every day, because that's when many funds vest, and when most of the daily volume occurs. It's a horrible irony. The "3:30 Ramp" is so well known that there's a Twitter parody account followed by huge swaths of "Finance Twitter."
- analog31 10y ago
  Is it enough to cover the typical discount broker commission?
  - hkmurakami 10y ago
    That would depend on your trading volume.
- btown 10y ago
  https://twitter.com/RampCapitalLLC https://twitter.com/RampCapitalLLC http://www.zerohedge.com/news/2013-04-08/invest-330-pm-ramp-capital-lp-266-annualized-outperformance http://www.zerohedge.com/news/2013-04-08/invest-330-pm-ramp-... I barely know anything about trading, and nonetheless this is absolutely glorious. It's grown into a subculture that rivals any subreddit, with its own set of memes, photoshops, even animations. And to listen to the ever-bullish narrator, there's no end in sight to the ramp...
- dsacco 10y ago
  >> Funny enough, index funds outperform hedge funds, etc I'm weary of reading this on Hacker News. Index funds do not beat hedge funds. That statement is devoid of nuance and accuracy, and contributes to a narrative that active managers do not have a skillset or function. Most hedge funds do not maintain performance that beats the market, but many do. This is easily verifiable.
  - fauigerzigerk 10y ago
    >Most hedge funds do not maintain performance that beats the market, but many do. This is easily verifiable. Yes, it's easily verifiable. It's also completely meaningless without a rational way to predict which ones will be outperforming in the future.
    - dsacco 10y ago
      It's not at all meaningless, because it is rational to use past performance as a predictor of future performance. Past performance does not necessarily indicate future performance, and it should not be the only predictor, but to dismiss a fund's history as inconsequential to its future is silly. A fund's prior performance is a useful signal that can be rationally incorporated into a risk versus reward decision process.
      - fauigerzigerk 10y ago
        >Past performance does not necessarily indicate future performance, and it should not be the only predictor, but to dismiss a fund's history as inconsequential to its future is silly. I'm not dismissing it unconditionally, but I'm not going to believe it unless I see the data. What's the probability of a fund outperforming given it has outperformed the year before?
        j1o1h1n 10y ago
        If it has been doing it for three of the last four years, good. If it has been doing it for five of the last seven years, dodgy. IANACFA
- pakitan 10y ago
  I don't see how this can be a viable strategy, if the effect is so well known. These things only work as long as few people are aware of the pattern.
prostoalex 10y ago
Why not choose the 3 or 4 that happened to perform well and buy a full-page ad featuring them in Wall Street Journal, Money and Kiplinger's, the way every other fund company had done?

fullshark 10y ago

Wow I thought you were joking about that book title

nine_k 10y ago
Poe's Law.

themartorana 10y ago

Wooooow. It's always funny/concerning when people who make money by taking advantage of others by leveraging their lack of education then start acting as though fixes to that imbalance are afronts to their earned/deserved position. Although, when any industry changes, those that stand to lose always put up a fight. Everyone thinks everything they have is deserved or owed to them.

unimpressive 10y ago

I disagree, it's funny because it's so incredibly blatant.

andrepd 10y ago

"The tone of the report was a little operatic, but the question it raised is deadly serious."

majewsky 10y ago

> Why Passive Investing is Worse than Hitler