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Well, I posted some of my ideas and engaged other members on the VIC threads, which lead to an invitation for an interview with Joel Greenblatt. I had no doubt that I would bomb in any personal interview and it would soon be discovered that I was completely unqualified to manage any money (a fraud), so that interview was never going to happen. Just prior to this invitation, another individual who was also close to Gotham had offered me a job (unrelated to Joel's offer), that required no live interview and it was an offer that couldn't be refused. Who wouldn't want a long term contract with a guarantied salary managing money in sandals, shorts, and a T-shirt from his Florida lanai!

Sounds like you made a good choice. Funny, though, I basically took the other road and on the ground it looks a hell of a lot like yours except with state taxes. My alternative at the time since I had already ditched my original path was to go work for McKinsey, which made it close to a no-brainer.

(4) I have never owned an index fund and I would never own the S&P 500 or R2K. I might be persuaded to own an equal-weighted index, but I believe even after management fees and incentive fees (yes, I pay a carried interest over a hurdle rate), certain individuals will outperform on a net basis.

My guess is also that this is true, at least for a while still, and not just in the uninteresting statistical sense. On the other hand I do think it will inexorably get harder to outperform and in fact already has in the relatively short time (about 17 years) I've been doing this for a living. I also tend to agree with the adage that even if a decent-sized group of smaller active managers can reliably outperform, it's pretty hard for most potential LPs to figure out who they are. So the generic Buffet-Bogle advice to find some passive, diversified index with the lowest fees still makes sense to me for the large majority of investors. People get caught up in drawbacks to indices such as market-weighting and objecting to anything truly meeting some Platonic ideal of passive versus active, but I think that's mostly just bored little toy dogs barking at the neighbor mowing her lawn down the block. Maybe one day we will really see so much passivity that there aren't enough independent jellybean guessers to make a quorum and market efficiency genuinely suffers, but I think we are pretty far from that day now and my guess is it never actually arrives.

On the other hand I also think there are a lot of active management choices where the decision relative to a passive index isn't nearly as important as it is in general. Even if you're rightly skeptical whether you are the relatively rare LP or mutual fund investor who can spot the long-term out-performer, you might at least be in the significantly larger group who can pretty easily rule out the large swath of options which combine high fees with an either silly or index-mimicking investment approach. Once you narrow it down to a more reasonable group of options with a fighting chance to outperform after fees, the distinction between between active and passive probably won't be all that big, in which case the decision isn't such a big deal.
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