Youtube daily so Jun 30 2017

In my last video, I talked about some of the challenges that active managers face in outperforming

the market.

It boils down to their relatively high fees, and intense competition from other managers.

There is another, less obvious reason that active managers have so much trouble beating

the market.

We know empirically that a small number of stocks in an index tend to drive the performance

of that index.

So trying to select stocks in an index, dramatically increases the probability of underperforming that index.

When trying to pick stocks in an index in an effort to beat the index, the likelihood

of underperforming is much greater than the likelihood of outperforming.

This research was published in a 2017 paper by Heaton, Polson, and Witte titled "Why Indexing

Works" and it is yet another blow to active management.

I'm Ben Felix of PWL Capital and this is Common Sense Investing...

If we look at data on market returns, the basis of this research is clear.

Most of the market's returns come from a small number of stocks.

Let's look at an example using data from global stock markets between 1994 and 2016.

Over that time period, global stocks returned an average of 7.3% per year.

Not bad.

If we remove the top 10% of stocks in that global market portfolio, the average annual

return drops to 2.9%.

Excluding the top 25% results in the average annual return dropping to a much less exciting

-5.2%.

Of course, it would be great if active managers could identify those top performing stocks ahead of time

but we have seen the data around their ability to do so - it doesn't look very good.

We know that, in most cases, active managers' performance can be attributed to luck rather

than skill.

A lucky manager has been fortunate to randomly select stocks that have done well.

In their paper, Heaton, Polson, and Witte lay out a very simple example explaining the

challenge that active managers face based on what we know about market returns.

If we have an index consisting of five stocks, and assume that four of them will return 10%

and one will return 50% over a given time period, and we then suppose that active managers

are going to create portfolios using either one or two of those stocks, in equal weights

there will be a set of fifteen possible actively managed portfolios from stocks in that index.

Ten of the fifteen portfolios will earn a 10% return due to omitting the 50% returning stock,

and five of the fifteen portfolios will earn either a 30% or a 50% return due to

holding the 50% stock, depending on whether it is a one or two stock portfolio.

In this example, the average return of the stocks in the index, and all active fund managers,

is 18% (before fees).

Just like we would expect, all active managers together get the return of the market.

But when we look at each portfolio individually, two-thirds of the actively managed portfolios

will underperform the index due to their not holding the 50% returning stock, which is

always included in the index.

Closet indexing is the result of active managers owning the market like an index fund, but

charging active management level fees. A strategy that is guaranteed to lose.

To differentiate themselves from closet-indexers

Some active managers will pitch themselves as having high conviction, or high active

share, meaning that they are very different from the index.

The research that we have discussed in this video shows that even if you are able to find

a manager that is truly active and has low fees, there is a relatively low probability that they

will be able to deliver market beating performance.

With this high probability of underperformance, finding a skilled manager, which we already

know to be beyond challenging, becomes increasingly important.

Fees typically take the blame for the systematic underperformance of active managers, but this

research demonstrates another big hurdle that needs to be overcome to beat the market.

If active managers miss out on the relatively small proportion of top performing stocks,

they are at significant risk of trailing the market.

In my next video, I will be talking about downside protection, one of the most prolific

sales pitches in the investment management industry.

Do index funds protect your downside?

Join me to find out.

My name is Ben Felix of PWL Capital and this is Common Sense Investing.

I'll be talking about this and many other common sense investing topics in this series,

so subscribe and click the bell for updates.

I'd also love to hear from you as to what topics you'd like me to cover.

For more infomation >> Why It's So Hard to Beat the Market pt 2 | Common Sense Investing with Ben Felix - Duration: 4:39.

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So wait; indeed we, along with you, are waiting - Duration: 0:44.

Say, "Never will we be struck except by what Allah has decreed for us; He is our protector.

And upon Allah let the believers rely.

Say, "Do you await for us except one of the two best things

while we await for you that Allah will afflict you with punishment from Himself or at our hands

So wait; indeed we, along with you, are waiting.

For more infomation >> So wait; indeed we, along with you, are waiting - Duration: 0:44.

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Giftige Stickoxide: So funktionieren die Abgasmessungen der Deutschen Umwelthilfe - Duration: 3:25.

For more infomation >> Giftige Stickoxide: So funktionieren die Abgasmessungen der Deutschen Umwelthilfe - Duration: 3:25.

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MMD Meme Compilation (Thank you so much for 100+ subs) - Duration: 25:55.

Ah...What a day...

The next competition...

You will do your best, Shizuo.

Talk seriously.

You'll find yourself at the edge of ice.

Piko!

Congrats on qualifying for The Grand Prix Final.

I knew you'd make it.

MIZANO!!!

Thank you.

What are you doing?

Was that Shizuo screaming?

What's this? A hugging competition?

JJ is-- Uh-

Huh?!?! Stay away from me!!!

Alright. I guess I'll let you off with that.

It's always good to settle a score.

Hey! Why aren't you injured anyway?

Because I parried your whole attack.

I thought I could singe you a little...

So, is it safe to assume your the same again?

Oh, I was the same the whole time.

I can't believe you got the nerve to say that after all this time.

My feelings for you are still in my heart.

But it looks like I have one more thing to treasure now.

That's all good, right, CND?

What?

W-wait--

Wh-What did you do that for?

You better get ready. I am greedy and selfish you know.

Hey...

I'm really glad... I fell in love with you...

...Emra...

Don't die... Don't you dare die...

You're gonna stand on the winning side, are you?

What are you saying? I'm already on the winning side.

I love you, John...

Hey, Gakupo, It's your turn now!

Coming~

Say "cheese"

Well?

Don't look.

For more infomation >> MMD Meme Compilation (Thank you so much for 100+ subs) - Duration: 25:55.

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So Far Away (SUGA, 진, 정국 Ver.) Fan MV - Duration: 5:35.

It sucks when you don't have anything you want to do (You don't have)

I know it's pathetic to not have something as common as a dream, I know

"You said to do as I'm told, that it would all be fine when I go to university"

I'm the asshole for believing those words

I live because I can't die

Give me some drinks (Give me some drinks)

I want to get drunk today

Please don't stop me

Anything will be fine (Anything will be fine)

Alcohol is a luxury for person with no job to have a drink

I can't stand being sober

Everyone else is running, why am I the only one here?

So far away

If I have a dream

If I have a dream that flies away

Don't fall away

Yeah

If I have a dream

If I have a dream that flies away

Oh oh oh

Dream

I will be there for your creation until the end of your life

Dream

Wherever you might be, it will be lenient

Dream

You will fully bloom after all the hardships

Dream

Though your beginnings may be humble, may the end be prosperous

Yeah, fuck, I live because I can't die (Live)

Nothing is more miserable and lonely than not having something you want to do (Something)

The only thing everyone around me says

Is to come to my senses

I try to vent out my anger but the only one here with me is me

So what's the point of venting?

Every morning, it's terrifying to open my eyes, (It's terrifying) to breathe

My friends, even my family are getting further away

As time goes by, I'm becoming more impatient

The feeling of being alone

I am on my own right now

I want everything to disappear

I want it to disappear like a mirage

Want it to disappear

I want my damn self to disappear

Like this, the world throws me away

In that moment I'm getting farther away from the sky

I'm falling

So far away

If I have a dream

If I have a dream that flies away

Don't fall away

If I have a dream

If I have a dream that flies away

Oh oh oh

Dream

I will be there for your creation until the end of your life

Dream

Wherever you might be, it will be lenient

Dream

You will fully bloom after all the hardships

Dream

Though your beginnings may be humble, may the end be prosperous

So far away

If I have a dream

If I have a dream that flies away

Don't fall away

Yeah

If I have a dream

If I have a dream that flies away

Oh oh oh

Dream

I will be there for your creation until the end of your life

Dream

Wherever you might be, it will be lenient

Dream

You will fully bloom after all the hardships

Dream

Though your beginnings may be humble, may the end be prosperous

I will be there for your creation until the end of your life (First love)

Wherever you might be, it will be lenient

First love

You will fully bloom after all the hardships

Though your beginnings may be humble, may the end be prosperous

So far away

First love

So far away

First love

So far away

First love

So far away

First love

So far away

Don't fall away

So far away

Don't fall away

"Teamwork makes the dream work"

For more infomation >> So Far Away (SUGA, 진, 정국 Ver.) Fan MV - Duration: 5:35.

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MÈO hài hước,tinh nghịch nhất thế giới(Funny cat_Cats are so funny you will laughing)p7 - Duration: 17:53.

For more infomation >> MÈO hài hước,tinh nghịch nhất thế giới(Funny cat_Cats are so funny you will laughing)p7 - Duration: 17:53.

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🌲🌲How to draw MINIONS so cute step by step easy for kids children - Duration: 1:34.

For more infomation >> 🌲🌲How to draw MINIONS so cute step by step easy for kids children - Duration: 1:34.

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How to draw MINIONS so cute step by step easy for kids children - Duration: 1:06.

For more infomation >> How to draw MINIONS so cute step by step easy for kids children - Duration: 1:06.

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So you thing you're going to beat the traffic? - Duration: 1:44.

For more infomation >> So you thing you're going to beat the traffic? - Duration: 1:44.

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[繁中/ENG]20170629蘇志燮mise-en-scene開幕式 So Jisub at mise-en-scene opening ceremoony - Duration: 1:24.

subtitle by sojisubar

Congrat to the opening of mise-en-scène short film festival

It's my first time being a judge

Although I still have a lot to improve

I'll try my best and discuss with other judges

Thanks

For more infomation >> [繁中/ENG]20170629蘇志燮mise-en-scene開幕式 So Jisub at mise-en-scene opening ceremoony - Duration: 1:24.

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How to draw MINIONS so cute step by step easy for kids children - Duration: 1:14.

For more infomation >> How to draw MINIONS so cute step by step easy for kids children - Duration: 1:14.

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"I was so relieved - Queen's was the place for me" - Duration: 2:28.

For more infomation >> "I was so relieved - Queen's was the place for me" - Duration: 2:28.

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Motsis Undercover-Hochzeit: So findet's Angelina Kirsch - Duration: 1:10.

For more infomation >> Motsis Undercover-Hochzeit: So findet's Angelina Kirsch - Duration: 1:10.

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Regisseur Detlev Buck: So lief Stefanie Giesingers Filmdebüt - Duration: 0:52.

For more infomation >> Regisseur Detlev Buck: So lief Stefanie Giesingers Filmdebüt - Duration: 0:52.

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Das ist Amore: So schwärmt Neu-Papa Nevio Passaro von Baby! - Duration: 0:47.

For more infomation >> Das ist Amore: So schwärmt Neu-Papa Nevio Passaro von Baby! - Duration: 0:47.

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What The Supreme Court Is About To Do Is So EXCITING, Trump Will Jump For Joy! - Duration: 2:12.

What The Supreme Court Is About To Do Is So EXCITING, Trump Will Jump For Joy!

By Stacy Law

The Highest Court in the country has spent over year doing very little.

Ever since Justice Scalia passed, in February 2016, they�ve been somewhat crippled, unable

to do much.

But no longer!

President Trump fixed that, with his almost immediate appointment of Justice Gorsuch to

the Court.

And thank goodness for that!

We need the SCOTUS to operate at full force, to move our country forward related to some

of our biggest controversies.

Here is what they have set to consider during their next term:

President Trump�s Travel Ban.

They�ve already started that one:

2.

Whether a Business Owner Can Religiously Object to Doing Business With a LGBT

3.

Whether Partisan Gerrymandering is Unlawful

4.

Whether Our Cell Phone Data May Be Seized By Police Without a Warrant

These are all very big issues, ya�ll, and they could affect all of our lives, in some

way.

For example, whether Trump�s travel ban is upheld could affect whether/how ISIS is

able to spread into our country.

Will your local baker go out of business because he/she can�t express his religious liberty,

and must bake a cake against his religious beliefs?

Will the GOP lose its advantage based upon how legislative district lines are drawn?

If you�re accused of a crime, will the prosecutor continue to be able to get your cell phone

data without a warrant?

Remember, you�re innocent until proven guilty!

As you can see, this is big stuff!

I�m glad the Supreme Court is back at full force, set to make big decisions.

If you are, too, please SHARE this article and add your comments!