A Billionaire and an Oscar Winner

[mostlylong]

@intercst

If you had an early appreciation of this, you wouldn’t have had a need for employment, since.

And I enjoy the simplicity of why the average active investor trails the passive index, explained below, including a link to an explanation from Sharpe himself.

@mostlylong

The average active fund manager will always equal the market portfolio returns over any time period because

Market Portfolio Average Returns = Weighted Average of (Active Portfolio Returns + Passive Portfolio Returns)

This is explained in more detail here (Absolutely no new news here! - #4 by mostlylong) and from Sharpe The Arithmetic of Active Management.