Comments on: High-Cost Mutual Funds: Betting Against the House http://www.obliviousinvestor.com/high-cost-mutual-funds-betting-against-the-house/ Investing Blog: The Oblivious Investor Thu, 29 Jul 2010 15:54:20 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Monevator http://www.obliviousinvestor.com/high-cost-mutual-funds-betting-against-the-house/comment-page-1/#comment-127 Monevator Fri, 12 Dec 2008 01:51:02 +0000 http://www.obliviousinvestor.com/?p=602#comment-127 This is one of my (many) bugbears with (most) the huge salaries of most fund managers. They tell you their big pay packets are justified because they have the edge to beat the market. Yet as you say it's a zero sum game. So by definition half in fact demonstrably don't have the edge to beat the market*, and should in therefore be paid a lot less than, say, my cleaner, who at least leaves the office cleaner than when she started. (*Of course that edge turns out to be 95% random noise of a five-10 year view anyway!) This is one of my (many) bugbears with (most) the huge salaries of most fund managers.

They tell you their big pay packets are justified because they have the edge to beat the market. Yet as you say it’s a zero sum game. So by definition half in fact demonstrably don’t have the edge to beat the market*, and should in therefore be paid a lot less than, say, my cleaner, who at least leaves the office cleaner than when she started.

(*Of course that edge turns out to be 95% random noise of a five-10 year view anyway!)

]]> By: Miranda http://www.obliviousinvestor.com/high-cost-mutual-funds-betting-against-the-house/comment-page-1/#comment-125 Miranda Wed, 10 Dec 2008 14:14:25 +0000 http://www.obliviousinvestor.com/?p=602#comment-125 Ah, the mutual fund. It is especially important to check on costs, since these funds often make up a substantial portion of one's retirement account. Ah, the mutual fund. It is especially important to check on costs, since these funds often make up a substantial portion of one’s retirement account.

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