This was a post by Fletch, responding to an earlier post by me. This was post #55 on this board.
From Saul’s Post: This is astounding. The average hedge fund gained 6.5% in 2013, when the S&P 500 gained 29.6%, and Loeb is congratulated because he gained 25%. It shows how hard it is when you are investing billions of dollars, and how we can beat any Mutual or Hedge Fund on a consistent basis. He’s too big to invest in most MF RB type stocks.
Fletch: It really is amazing.
To give another example, I have two young children (ages 26 months and 4 months). They each have a 529 college plan that is managed by TIA CREFF. I also have another account that I manage that is earmarked for their college. Money goes in equally - so for example each quarter I’ll put $1,000 each into both 529 plans and then $2,000 into the combined, self managed account, totaling $2,000 invested into the CREFF accounts and $2,000 invested into the account I manage myself. That way, with the CREFF accounts and my own account getting the same amount of “seed capital” I can really see how I’m doing against CREFF (the wife was nervous about me managing ALL of the college money).
As you mentioned in your post, in 2013 the S&P 500 returned 29.6%. For 2013 I generated a 60% return in the self-manged college account while the CREFF account for my daughter (the only CREFF account that was open all year) generated a 21.6% return. And her account is in the most “aggressive” category as she has at least 16 years until the money will be needed.
I was able to add to BOFI, DDD, PCLN, Z, and a number of other stocks on dips throughout the year - while the professional money manager trailed an index fund by 8 percentage points. The small investor has a HUGE advantage provided he/she has the right temperament and can spot (and act) on good opportunities when they present themselves.