Active management (redux)

An interesting graph showing the (very small) % of stocks to beat the benchmark (for the S&P500).

That makes it harder than usual for any given active manager to outperform, as you have to a) own the 30% of stocks that “won” and not own the other 70% that didn’t, and b) you gotta own that 30% in sufficient size to carry the day.

Now if you have a mix of styles on, e.g. Quality, Growth, Value, it’s pretty clear you aren’t going to have those stocks in the requisite size.

Nothing earth shattering in this, we know Tech (Mag 7, and really the Tremendous 1, NVIDIA) was what you needed to hold to meaningfully beat the benchmark over 2023 and (thus far) 2024.

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