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Stocks B / Berkshire Hathaway


Subject:  Re: Stock Picking Getting Harder Date:  11/24/2017  2:35 PM
Author:  rclosch Number:  232801 of 245503

Information is everywhere, too. You can't beat insiders. They know it all. We little guy stock pickers cannot beat the next echelon behind insiders, the money manager stock pickers who know nearly all there is to know about particular companies. It is what they do day in and day out.

Maybe so. But I suspect that the attractiveness of index investing today has a strong element of hindsight bias.

Stock picking has always been difficult, but has been particularly difficult since the 2008 crash. The massive flow of funds into indexing since 2008 has left managed funds in the dust.

The managed vs unmanaged metrics have in the past been a cyclical. The size and duration of the current swing suggest that when the current cycle peaks, the swing back toward managed will make stock picking a lot easier in the next ten years.

I think this is particularly true when future performance will be measured compared to the popular large cap American centric indexes (S&P 500). The current popularity of index funds has directed a huge flow of funds into large cap American Companies without any attempt to evaluate the potential for future growth of the companies involved.

I expect that managed funds and individual stock pickers will have an easier time going forward.
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