Its become fashionable in recent years to discount stock picking and market timing as exercises in futility. However, there are the anomalies such as stock-picker extraordinaire, Warren Buffett. And in Canada, there is CIBC World Markets Peter Gibson, who not only called the financial crisis, but has regularly won No. 1 rankings in the Brendan Wood International survey.
Maybe theyre the lucky coin flippers who tossed heads 100 times in a row. But, then again, maybe their performance is a result of skill and hard work. As Gerald Loeb penned way back in 1935 in his now classic text, The Battle for Investment Survival:
The number of individuals possessed of the necessary flair for combating the obstacles to successful investment and possessed of the necessary drive to cultivate this ability is comparable to the proportion similarly successful in other fields requiring a like background. Really top-flight investors are no more frequent, proportionately, than capable Army generals, Navy admirals, doctors, scientists, lawyers, artists, composers and musicians.
Its not common to label General Douglas MacArthur, Albert Einstein or Mozart as lucky people. Perhaps its a little unfair to apply the same description to persons with long-term track records of above-average performance in the investment field?
Of course, for most of do-it-yourself investors, passive investing and index funds are the way to go. Active investing is hard to do if you only have a few hours on the weekends and in the evenings. Andprofessional money managers will be, by defintion, average in performance– so, when their fees are included, they will underperform the market average.
Blogs & Comment
Lucky coin flippers?
By Larry MacDonald
Its become fashionable in recent years to discount stock picking and market timing as exercises in futility. However, there are the anomalies such as stock-picker extraordinaire, Warren Buffett. And in Canada, there is CIBC World Markets Peter Gibson, who not only called the financial crisis, but has regularly won No. 1 rankings in the Brendan Wood International survey.
Maybe theyre the lucky coin flippers who tossed heads 100 times in a row. But, then again, maybe their performance is a result of skill and hard work. As Gerald Loeb penned way back in 1935 in his now classic text, The Battle for Investment Survival:
The number of individuals possessed of the necessary flair for combating the obstacles to successful investment and possessed of the necessary drive to cultivate this ability is comparable to the proportion similarly successful in other fields requiring a like background. Really top-flight investors are no more frequent, proportionately, than capable Army generals, Navy admirals, doctors, scientists, lawyers, artists, composers and musicians.
Its not common to label General Douglas MacArthur, Albert Einstein or Mozart as lucky people. Perhaps its a little unfair to apply the same description to persons with long-term track records of above-average performance in the investment field?
Of course, for most of do-it-yourself investors, passive investing and index funds are the way to go. Active investing is hard to do if you only have a few hours on the weekends and in the evenings. Andprofessional money managers will be, by defintion, average in performance– so, when their fees are included, they will underperform the market average.