Active management is a zero-sum game before cost, and the winners have to win at the expense of the losers.

I don't think the Federal Reserve has any role in how high rates are right now. I don't understand why everyone is paying attention to this tapering. The Fed is using one kind of bond to buy another kind of bond. What's the big deal, and why is anyone taking the Fed seriously?

People would be a lot more skeptical if they understood that there is an incredible amount of chance in the results that you observe for active managers. So the distribution of outcomes is enormously wide - but that's exactly what you'd expect by chance with lots of active managers who hold imperfectly diversified portfolios. The really good portfolios contain a lot of really lucky picks, and the really bad portfolios contain a lot of really unlucky picks as well as some really bad ones.

In an efficient market at any point in time the actual price of a security will be a good estimate of its intrinsic value.

Active management is a zero-sum game before cost, and the winners have to win at the expense of the losers.

The distribution of the market is fat-tailed relative to the normal distribution... For passive investors, none of this matters, beyond being aware that outlier returns are more common than would be expected if return distributions were normal.

After taking risk into account, do more managers than you’d see by chance outperform with persistence? Virtually every economist who studied this question answers with a resounding 'no.'