Summary: The market has always been tough to beat, but the ability to investors to gain inexpensive exposure to factors like value and momentum has made the job of active managers even harder. In this week's episode, we talk about why the pursuit of alpha has become more difficult over time.
Jack's article: http://blog.validea.com/the-rising-bar-for-active-management/
Active vs. Passive: https://us.spindices.com/spiva/#/
Long term evidence behind factor investing: https://thebamalliance.com/blog/the-long-term-evidence-on-factor-based-investing/
AQR "Superstar Investors": https://www.aqr.com/Insights/Research/Alternative-Thinking/Superstar-Investors
Twitter Thread on Alpha: https://twitter.com/GestaltU/status/1189882407295553536
Bill Sharpe's "The Arithmetic of Active Management": https://web.stanford.edu/~wfsharpe/art/active/active.htm
#ExcessReturns #ActiveManagement #Alpha #Factors
ABOUT THE PODCAST
Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long-term investors.
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