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Links

Linkfest: 02 December, 2022

Some stuff I am reading today morning:

Softbank to sell 5% in Policy Bazaar today (MC)

RBI seen raising rates (BW)

Saurabh Mukerjea’s PMS is underperforming deeply (Mint)

How CFOs become the fall guys (Forbes)

Quality at the Right Price (Brian Langis)

IIFL MF launches India’s first tax saver index fund (Fortune)

Are MF NAVs near all time highs? (Stable Investor)

Thoughts on the Crypto market (Arca)

How VCs can get avoid getting tricked by obvious frauds (Rohit Krishnan)

What we learned in Q3 CY2022 (Octahedron Capital)

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InvITs REIT

Credit Profile of InvITs- REITs

Source : CRISIL

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Links

Linkfest: 01 December, 2022

Some stuff I am reading today morning:

Reliance Capital to go for Liquidation (BS)

Fed Chair Powell on inflation ( FED )

Obituary: Vikram Kirloskar (Forbes)

Amul Butter in short supply (Rediff)

On Bank Defaulter Jatin Mehta, Winsome Diamonds (Money Life)

Samit Vartak on his hits & misses (Morningstar)

Thread: Angel investing in startups Head Quartered Abroad (Aakrit Vaish)

How to avoid ‘Secondhand Smoke’ from illquid investments (II)

The big advantage of stocks is you have to be right in very few (Buffett)

Interview with Boaz Weinstein (Big Picture)

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Excerpts

Woes of Active Fund Managers

Source: Evidence Investor

Absolute skill may be necessary for success as an active manager, but it is not sufficient. It’s relative skill that determines outperformance and underperformance. It’s not enough to be good at valuing companies; a successful active manager has to be better than his competitors.

If investment management is not unique in this respect, it at least is highly unusual. An average physician may be able to cure most illnesses, and an average lawyer may be a perfectly adequate source of legal representation for most needs. However, investment management is different: an average investment manager is of no value at all. Investing is unusual, in that the collective judgement of all the participants (weighted by the amount of money they control) is… available for free… If a professional investor is to earn excess returns for his client, being good is insufficient — he must be exceptional.

The difficulty is compounded when we consider what happens when assets move from active managers to index funds. Presumably, the least capable active managers lose the most assets. This means that the quality of the surviving active managers rises as assets move to passive alternatives, making the competition for outperformance tougher. Active managers thus find it increasingly difficult to stay above average as index funds cull the weakest competitors.

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Chart Index

$7.1 Trillion

Source: Evidence Investor