Why the disdain for managed funds like ARKK that destroy total market funds?

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arcticpineapplecorp.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by arcticpineapplecorp. »

firebirdparts wrote: Sat Jan 15, 2022 2:54 pm I don't know. I'm kinda thinking when everybody thinks she's dead is when it'll start climbing again. you know how they say in Vegas, luck is bound to change.
Just because the first shall be the last doesn't mean the last shall be the first.

It's true that in one of the charts I posted showed that pension funds hire managers who HAD outperformed prior to their hire go on to underperform after being hired and then get fired only to outperform again.

But it's also true that in the first chart I posted above the study from William Sharpe showed that gurus' (like Cathie Wood) predictions had to be 74% or more accurate to beat the market, yet not a single one of those gurus from 2000 to 2012 had an accuracy of predictions sufficient to beat the market.

To use a gambling metaphor about Vegas and "luck" only makes the point that this is not investing, but speculating and gambling.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by arcticpineapplecorp. »

nisiprius wrote: Sat Jan 15, 2022 5:26 pm
S4C5 wrote: Fri Jan 14, 2022 6:25 pm...I got burned by Bruce Berkowitz in the early 2010s and now by Cathie Wood. I’m done with these people...
FlatSix wrote: Sat Jan 15, 2022 10:50 am It will be amusing (to me at least) in the near future the next hot fund manager bursts on the scene after a year of over performance and people will bring up Cathie Wood and ARKK as an example of what typically happens but people will have long forgotten about her (just like the dozens of other fund managers who had their 15 minutes of fame).
Exactly. What percentage of people reading this know who Bruce Berkowitz is?

:shock: How about that? His Fairholme Fund returned 41% in 2020.

A "telltale chart," described by John C. Bogle, plots the ratio of the cumulative growth of two funds. Basically, it measures the distance between two lines on a semilog growth chart. Despite spectacular early years, and then steady outperformance through 2010, and earning 41% in 2020--the only way a buy-and-hold investor could be ahead today would be to have bought the fund before 2002.

Image
I do. I remember a friend of mine asked for advice and she had a hodgepodge portfolio. I asked her how she picked what she did and she said her brother helped her. I noticed the Fairholme fund in her mix and she didn't want to dump that since it was the best performer even though I warned her about active management.

I followed Bruce's fall from grace with a certain amusement at knowing Jack Bogle's principles were as true as they were timeless.

I of course felt bad for my friend but she never listened to me anyway, like again when she got laid off and rolled her 401k into her bank's high cost variable annuity, despite my best efforts to do otherwise.

Some are just gluttons for punishment I suppose.

That is true of those who keep falling for active management despite the mountains of evidence they're likely to underperform.

P.s. when I typed in "fairholme" the autocorrect spelled "Fairhope". That sounds about right.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by buckeye7983 »

"No matter how desperately you chase past performance, you will never catch it. You can only buy future performance." -- Simon Lack
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by oneleaf »

I also occasionally check FAIRX just for fun. Berkowitz was manager of the decade on Morningstar. The fund's downfall may be the best example for me to learn never to even consider active management again (luckily, I never invested in it, but it was tempting). If you take a look at the portfolio today, it is like 76% one stock (JOE), 10% cash, and like 7% bonds. Oh and it still has a 1% expense ratio just for holding pretty much one stock. Not sure how anyone would still be holding on.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by jason2459 »

oneleaf wrote: Sun Jan 16, 2022 11:14 am I also occasionally check FAIRX just for fun. Berkowitz was manager of the decade on Morningstar. The fund's downfall may be the best example for me to learn never to even consider active management again (luckily, I never invested in it, but it was tempting). If you take a look at the portfolio today, it is like 76% one stock (JOE), 10% cash, and like 7% bonds. Oh and it still has a 1% expense ratio just for holding pretty much one stock. Not sure how anyone would still be holding on.
That is interesting. Feb 29th 2008 was when that fund first added JOE. It was at $38.45 in a downward trend and went down hill further from there. Wasn't until late 2020 did that company start an upward trend and broke even. Now currently $50.32.

I wonder why the hold for so long, why the massive overweight of that one company, and why it wouldn't be time now to take some gains and diversify the fund more.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by sycamore »

jason2459 wrote: Sun Jan 16, 2022 1:09 pm
oneleaf wrote: Sun Jan 16, 2022 11:14 am I also occasionally check FAIRX just for fun. Berkowitz was manager of the decade on Morningstar. The fund's downfall may be the best example for me to learn never to even consider active management again (luckily, I never invested in it, but it was tempting). If you take a look at the portfolio today, it is like 76% one stock (JOE), 10% cash, and like 7% bonds. Oh and it still has a 1% expense ratio just for holding pretty much one stock. Not sure how anyone would still be holding on.
That is interesting. Feb 29th 2008 was when that fund first added JOE. It was at $38.45 in a downward trend and went down hill further from there. Wasn't until late 2020 did that company start an upward trend and broke even. Now currently $50.32.

I wonder why the hold for so long, why the massive overweight of that one company, and why it wouldn't be time now to take some gains and diversify the fund more.
You obviously don't have "conviction".

And neither do I. :beer
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by nisiprius »

oneleaf wrote: Sun Jan 16, 2022 11:14 am I also occasionally check FAIRX just for fun. Berkowitz was manager of the decade on Morningstar. The fund's downfall may be the best example for me to learn never to even consider active management again (luckily, I never invested in it, but it was tempting). If you take a look at the portfolio today, it is like 76% one stock (JOE), 10% cash, and like 7% bonds. Oh and it still has a 1% expense ratio just for holding pretty much one stock. Not sure how anyone would still be holding on.
Good grief. You're right. I had to check. That seemed so hard to believe. Semiannual report

The Fairholme Fund, Top Holdings by Issuer (% of Net Assets)

The St. Joe Co. 70.0%
Federal National Mortgage Association 3.9%
Federal Home Loan Mortgage Corp. 3.8%
Imperial Metals Corp. 1.9%
Sears Holdings Corp. 0.1%
The entire schedule of investments fits on one page, p. 12, and consists of those five stocks--six holdings because it holds both common and preferred shares in Imperial Metals--and some Treasury bills and money market funds.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Nicolas »

jason2459 wrote: Sun Jan 16, 2022 1:09 pm
oneleaf wrote: Sun Jan 16, 2022 11:14 am I also occasionally check FAIRX just for fun. Berkowitz was manager of the decade on Morningstar. The fund's downfall may be the best example for me to learn never to even consider active management again (luckily, I never invested in it, but it was tempting). If you take a look at the portfolio today, it is like 76% one stock (JOE), 10% cash, and like 7% bonds. Oh and it still has a 1% expense ratio just for holding pretty much one stock. Not sure how anyone would still be holding on.
That is interesting. Feb 29th 2008 was when that fund first added JOE. It was at $38.45 in a downward trend and went down hill further from there. Wasn't until late 2020 did that company start an upward trend and broke even. Now currently $50.32.

I wonder why the hold for so long, why the massive overweight of that one company, and why it wouldn't be time now to take some gains and diversify the fund more.
I was an investor. I bought in after the “Manager of the Decade” award. I didn’t lose much before I sold and I think I about broke even. He was a big investor in Sears/Kmart too after their merger. He believed their real estate holdings were very valuable. Now of course it’s worth pennies, or maybe even one penny. I think Berkowitz became arrogant.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by nisiprius »

Here are some more telltale charts for some other once-legendary funds with once-universally-admired managers. Again, this is the ratio in cumulative total growth between the fund and an S&P 500 index fund.

SEQUX, the Sequoia Fund, praised by name by Warren Buffett in "The Superinvestors of Graham-and-Doddsville, managed by the same firm but not the same people when it stumbled in 2015:

Image

The Legg Mason Value Trust, since renamed Clearbridge Value Trust, managed by Bill Miller--subject of a worshipful 2006 book entitled The Man who Beats the S&P: Investing with Bill Miller. It outperformed the S&P 500 fifteen years in a row, a fact widely cited as absolute proof of active management superiority (surely that couldn't just be luck).

Image

And, very strikingly, the CGM Focus Fund, managed by Ken Heebner, and you wouldn't believe the universal acclaim he was getting from the financial press circa 2009--the literal word "genius" was often used:

Image
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by freyj6 »

I love how this was posted literally the day after ARKK peaked.

It's down 51% from then and we haven't even had a major correction.

I think threads like this are super important as reference material for when people get into the next big thing.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by tdmp »

It seems like most money invested in ARKK has lost money. A bunch of money was poured into the fund in span of about 4 months. Below is link from morningstar. This was from november 8, 2021: ARKK closed at $123.40...today it is $76.91

https://www.morningstar.com/articles/10 ... -investors
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Freefun »

It seems that active management doesn’t beat passive for a long time. One also has to pay significant fees for active management.

https://www.thestreet.com/investing/cat ... ose-ground

https://fortune.com/2022/01/19/cathie-w ... ed-nasdaq/
Cathie Wood’s ARK Innovation ETF has lagged the Nasdaq since 2018—while collecting over $200 million in fees
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by unclescrooge »

Freefun wrote: Wed Jan 19, 2022 7:28 pm It seems that active management doesn’t beat passive for a long time. One also has to pay significant fees for active management.

https://www.thestreet.com/investing/cat ... ose-ground

https://fortune.com/2022/01/19/cathie-w ... ed-nasdaq/
Cathie Wood’s ARK Innovation ETF has lagged the Nasdaq since 2018—while collecting over $200 million in fees
Now who thinks she isn't a genius? :mrgreen:
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by firebirdparts »

unclescrooge wrote: Wed Jan 19, 2022 8:37 pmNow who thinks she isn't a genius? :mrgreen:
They've been perfecting their art ever since the pyramids were built.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by moneyflowin »

Cathie Wood isn't a good stock picker, but a marketing genius

Since the OP disappeared back in October 2021, ARKK is down another 30%. I guess the OP didn't like how humble pie tastes and left. Or perhaps created a new account to avoid the shame of starting this thread at ARKK's peak? 8-)
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by TropikThunder »

moneyflowin wrote: Wed Jan 19, 2022 11:59 pm Cathie Wood isn't a good stock picker, but a marketing genius

Since the OP disappeared back in October 2021, ARKK is down another 30%. I guess the OP didn't like how humble pie tastes and left. Or perhaps created a new account to avoid the shame of starting this thread at ARKK's peak? 8-)
Hopefully OP didn't lose as much money as the guy who shorted Tesla. :P
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by bg5 »

Luckily I have around 500k saved....but I took a stab at some of Cathy Woods High flyers in the peak of the bubble. I bought some individual stock in draftkings, roku, docusign, square etc. Was up about 50% during the peak so I thought I was so smart. Now my losses are around 40k and the tough part to swallow is if I would of just had that money invested in VTI I would of made 27% last year :)

It was a great lesson for me to learn and I am glad its just 40K. Bottom line is 99% of the people in the world cannot outperform the market in the long term. Ignore the noise around you and when everything is going up you gotta be really cautious.

I am just glad this happened to me and not my kids. I plan to tell them this story when they get older and hopefully they learn from my mistakes :)

Ya win some and ya lose some....I am just glad I didnt lose everything and it was a great lesson to learn
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Marmot »

I am bumping this because I haven't got my dose of daily disdain :D yet.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by atdharris »

bg5 wrote: Thu Jan 20, 2022 7:29 am Luckily I have around 500k saved....but I took a stab at some of Cathy Woods High flyers in the peak of the bubble. I bought some individual stock in draftkings, roku, docusign, square etc. Was up about 50% during the peak so I thought I was so smart. Now my losses are around 40k and the tough part to swallow is if I would of just had that money invested in VTI I would of made 27% last year :)

It was a great lesson for me to learn and I am glad its just 40K. Bottom line is 99% of the people in the world cannot outperform the market in the long term. Ignore the noise around you and when everything is going up you gotta be really cautious.

I am just glad this happened to me and not my kids. I plan to tell them this story when they get older and hopefully they learn from my mistakes :)

Ya win some and ya lose some....I am just glad I didnt lose everything and it was a great lesson to learn
I'm glad I only put $10k in - in the hole $2,000, thinking about selling off what I have, but I probably will hold for now. This can't go much lower, right? :)
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by bg5 »

I have also not sold and at this point I am not worried about it. Hopefully they make somewhat of a comeback and if/when it does I will probably still take a loss and put that money into VTSAX
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by atdharris »

bg5 wrote: Thu Jan 20, 2022 8:45 am I have also not sold and at this point I am not worried about it. Hopefully they make somewhat of a comeback and if/when it does I will probably still take a loss and put that money into VTSAX
I think I am in the same camp. Most of ARKK's holdings are down 50-75%, and I don't think everything is going to go bankrupt. It may never recapture what it was, but I think it will rebound somewhat to the point I can sell.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by lostdog »

The OP is logged out and lurking on this thread.

Most of us learned this lesson and turned to total market index funds.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by bg5 »

atdharris wrote: Thu Jan 20, 2022 8:48 am
bg5 wrote: Thu Jan 20, 2022 8:45 am I have also not sold and at this point I am not worried about it. Hopefully they make somewhat of a comeback and if/when it does I will probably still take a loss and put that money into VTSAX
I think I am in the same camp. Most of ARKK's holdings are down 50-75%, and I don't think everything is going to go bankrupt. It may never recapture what it was, but I think it will rebound somewhat to the point I can sell.
Yes I agree.....there is no doubt these stocks could continue to sink lower. But at this point I am gonna just hold and hope for the best. Bottom line I learned that its just best to put your money into index funds and keep things simple :)
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by atdharris »

bg5 wrote: Thu Jan 20, 2022 9:00 am
atdharris wrote: Thu Jan 20, 2022 8:48 am
bg5 wrote: Thu Jan 20, 2022 8:45 am I have also not sold and at this point I am not worried about it. Hopefully they make somewhat of a comeback and if/when it does I will probably still take a loss and put that money into VTSAX
I think I am in the same camp. Most of ARKK's holdings are down 50-75%, and I don't think everything is going to go bankrupt. It may never recapture what it was, but I think it will rebound somewhat to the point I can sell.
Yes I agree.....there is no doubt these stocks could continue to sink lower. But at this point I am gonna just hold and hope for the best. Bottom line I learned that its just best to put your money into index funds and keep things simple :)
Agreed. If we could get back to ~$100/share, I'd feel fine selling and learning my lesson. We may not in this environment, but ARKK held up OK in 2018 when the Fed was hiking rates. You never know.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by vineviz »

atdharris wrote: Thu Jan 20, 2022 9:02 am Agreed. If we could get back to ~$100/share, I'd feel fine selling and learning my lesson. We may not in this environment, but ARKK held up OK in 2018 when the Fed was hiking rates. You never know.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by arcticpineapplecorp. »

freyj6 wrote: Tue Jan 18, 2022 7:41 pm I love how this was posted literally the day after ARKK peaked.

It's down 51% from then and we haven't even had a major correction.

I think threads like this are super important as reference material for when people get into the next big thing.
History teaches us that we don't learn from history.

This time (or stock or fund or manager) is different is an all too common refrain.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Candor »

arcticpineapplecorp. wrote: Thu Jan 20, 2022 9:26 am
freyj6 wrote: Tue Jan 18, 2022 7:41 pm I love how this was posted literally the day after ARKK peaked.

It's down 51% from then and we haven't even had a major correction.

I think threads like this are super important as reference material for when people get into the next big thing.
History teaches us that we don't learn from history.

This time (or stock or fund or manager) is different is an all too common refrain.
Many of us have learned from our own history but each generation, just like we did, has to learn it for themselves.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by atdharris »

arcticpineapplecorp. wrote: Thu Jan 20, 2022 9:26 am
freyj6 wrote: Tue Jan 18, 2022 7:41 pm I love how this was posted literally the day after ARKK peaked.

It's down 51% from then and we haven't even had a major correction.

I think threads like this are super important as reference material for when people get into the next big thing.
History teaches us that we don't learn from history.

This time (or stock or fund or manager) is different is an all too common refrain.
This has been a learning experience. The only other managed fund I have ever owned was T Rowe Price's Blue Chip Growth Fund, which performed well, but I can't say I've owned a fund that I've watched cut in half. I may be foolish continuing to hold but I cannot predict what ARKK will do next after the 55% drop
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by RetiredAL »

Candor wrote: Thu Jan 20, 2022 9:36 am
Many of us have learned from our own history but each generation, just like we did, has to learn it for themselves.
+1

In the pre-dot.com bust era, I thought technology was making investments forever different. Well, I got humbled but not skinned.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by arcticpineapplecorp. »

atdharris wrote: Thu Jan 20, 2022 9:40 am
arcticpineapplecorp. wrote: Thu Jan 20, 2022 9:26 am
freyj6 wrote: Tue Jan 18, 2022 7:41 pm I love how this was posted literally the day after ARKK peaked.

It's down 51% from then and we haven't even had a major correction.

I think threads like this are super important as reference material for when people get into the next big thing.
History teaches us that we don't learn from history.

This time (or stock or fund or manager) is different is an all too common refrain.
This has been a learning experience. The only other managed fund I have ever owned was T Rowe Price's Blue Chip Growth Fund, which performed well, but I can't say I've owned a fund that I've watched cut in half. I may be foolish continuing to hold but I cannot predict what ARKK will do next after the 55% drop
seems a pretty common experience though:

Image

Image
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Top99% »

RetiredAL wrote: Thu Jan 20, 2022 9:44 am
Candor wrote: Thu Jan 20, 2022 9:36 am
Many of us have learned from our own history but each generation, just like we did, has to learn it for themselves.
+1

In the pre-dot.com bust era, I thought technology was making investments forever different. Well, I got humbled but not skinned.
As Mike Tyson stated, "Everyone has a plan until they get punched in the mouth". During the pre-dot.com period I thought I had a brilliant plan picking hot individual stocks or funds. When the actual punch in the mouth (rapid loss of capital) came it hurt a lot more than I envisioned. I did get really lucky with Legg Mason Value Trust, holding it from 1999 - 2005 but I don't confuse my lucky outcome with brilliant strategy on my part. Many of the ARKK and Tesla bulls are going to need to learn the hard way. It looks like the face-punch is already starting with ARKK.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by HomerJ »

bg5 wrote: Thu Jan 20, 2022 7:29 am Luckily I have around 500k saved....but I took a stab at some of Cathy Woods High flyers in the peak of the bubble. I bought some individual stock in draftkings, roku, docusign, square etc. Was up about 50% during the peak so I thought I was so smart. Now my losses are around 40k and the tough part to swallow is if I would of just had that money invested in VTI I would of made 27% last year :)

It was a great lesson for me to learn and I am glad its just 40K. Bottom line is 99% of the people in the world cannot outperform the market in the long term. Ignore the noise around you and when everything is going up you gotta be really cautious.

I am just glad this happened to me and not my kids. I plan to tell them this story when they get older and hopefully they learn from my mistakes :)

Ya win some and ya lose some....I am just glad I didnt lose everything and it was a great lesson to learn
Same thing happened to me in the 1990s... It will be a cheap lesson over the long run.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by hisdudeness »

lostdog wrote: Thu Jan 20, 2022 8:55 am The OP is logged out and lurking on this thread.

Most of us learned this lesson and turned to total market index funds.
You must find a way to monetize your Lurker Detector.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by GP813 »

Jack Bogle explained this phenomenon perfectly about actively managed "hot" mutual funds which applies to actively managed ETF's as well, starting at 2:40.

https://www.youtube.com/watch?v=5YD3xW_aK58&t=2m40s
Last edited by GP813 on Thu Jan 20, 2022 11:28 am, edited 1 time in total.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by lostdog »

hisdudeness wrote: Thu Jan 20, 2022 10:40 am
lostdog wrote: Thu Jan 20, 2022 8:55 am The OP is logged out and lurking on this thread.

Most of us learned this lesson and turned to total market index funds.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by hnd »

oh man I read about the Fairholme fund in an old Kiplingers magazine. they were gushing over it. I checked it out and was like yeah no thanks.

If you have a subscription to Morningstar you can view a list of all the analysts articles on it. its pretty funny to see.

just a few,

2005 - Showing off its investing acumen.
2008 - This mutual fund is one of the very best.
2009 - This fine fund hasn't missed a beat.
2010 - This fund has reloaded.
2011 - If new investors have found this recent stretch difficult to bear, it may be best to look elsewhere.
2014 - Hold off on the grave dancing
2018 - This fund is under review
2020 - Dropping coverage of Fairholme
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by hnd »

As has likely been discussed ad nauseum is that there is some advantage in being unknown or flying under the radar for a time. there will be plenty of funds that squeak through and because you aren't playing with that much AUM and can take relatively reasonable positions in many types of companies companies. You, also, can take on extra risk that comes with investing 3-10% of your fund in handfuls of smallcap and midcap companies each and have a shot at a return greater than the sp500. and when you do, the AUM floods into your fund over a short period of time fundamentally changing what you can buy and how you can buy it. and even if you did beat the streets so to speak prior....that advantage is gone and even the peter lynch's, will danoffs, and Bill Nygrens become pedestrian again.

That is what has happened IMO to ARKK. the transparency of the stocks she buys/sells and the large amount of AUM taken in (33 billion in 6 months) just made the idea of outperformance a snowballs chance in hell.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by chicagoan23 »

chicagoan23 wrote: Sat Mar 06, 2021 1:02 pm
[OP] is convinced that ARK would outperform because it has analysts who are picking winners in emerging technology. Just like some are/were convinced about BTC, or about TSLA, or about GME, for whatever reason. It's possible that these theories are sound and will be proven correct, but I think the key point for all investors to remember is that even a sound strategy based on reasoned analysis can be "destroyed" (to choose a word) by the whims of the market. The same concept applies to the posters who were at 90+% cash by the end of last March, convinced that the virus shutdown was going to wipe out the stock market even further and who were ready to pounce when there was blood in the streets. That blood never came and it cost them big time if they stayed on the sidelines.

For every theory that hits, there are many that miss. There is no way to tell which theories are going to be correct. You will almost certainly lose to the market, long-term, if you jump around based on whatever well-thought out theory you happen to have at a given time. So please, don't take that risk, unless it is with just a small portion of your portfolio.
55% down since the original post. Absolutely amazing!
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by Mel Lindauer »

vineviz wrote: Thu Jan 20, 2022 9:21 am
atdharris wrote: Thu Jan 20, 2022 9:02 am Agreed. If we could get back to ~$100/share, I'd feel fine selling and learning my lesson. We may not in this environment, but ARKK held up OK in 2018 when the Fed was hiking rates. You never know.
Anchoring bias is one of the most robustly observed behavioral biases.
I was going to post the same thing after reading so many of the "anchoring bias" posts above. Since you beat me to it, I'll simply add that I agree with you. Perhaps some folks can learn something new by googling "Anchoring bias".
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by impatientInv »

Ark selectively removing YTD and 1Y performance from it's website.

Image
https://ark-funds.com/funds/arkk/
No individual stocks.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by james22 »

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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by nisiprius »

Last week's Rational Reminder Podcast #183, "Market Efficiency Myths and Misconceptions"--I still haven't gotten to the market efficiency part--has a lot to say about Cathie Wood and the ARK funds:
Speaking of bubbles: innovation stocks in deep value territory as per Cathie Wood. [0:26:08]

ARK’s forecast for innovation platforms and the 30-40 percent compound annual rate of return their strategies could deliver in five years. [0:32:01]

What deep value looks like according to ARK; prices to book, sale, and earnings. [0:33:30]

Thoughts on the size of innovation platforms relative to global market cap. [0:34:47]

Why growth in earnings per share, not market cap, results in growth in returns. [0:36:14]
It's well worth listening to. They say something polite about not criticizing Cathie Wood, before describing her previous records managing other funds, and analyzing her assertion that the stocks in her fund are in "deep value" territory and her claim that her strategies will return 30-40% compounded every year for five years--based on her belief that the total market cap of "innovation platforms" will do that.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by nedsaid »

Wow, this thread didn't age well. ARKK is down -51.33% for one year, down -25.15% Year To Date, and down -7.94% this week.

Write on a chalkboard 100 times. . .

I will not chase performance.
I will not chase performance.
I will not chase performance.

On second thought, make that 1,000 times. Performance chasing often ends in tears.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by willthrill81 »

It looks like the OP is long gone. I understand why s/he is gone, but I really hope that the lesson was learned well.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by HomerJ »

willthrill81 wrote: Tue Jan 25, 2022 9:16 pm It looks like the OP is long gone. I understand why s/he is gone, but I really hope that the lesson was learned well.
Hey, I learned the same lesson back in the 1990s.. We can't all throw stones. Hope he comes back and tries to educate people in 2040, but they probably won't listen.

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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by peskypesky »

nedsaid wrote: Tue Jan 25, 2022 9:13 pm Wow, this thread didn't age well. ARKK is down -51.33% for one year, down -25.15% Year To Date, and down -7.94% this week.

Write on a chalkboard 100 times. . .

I will not chase performance.
I will not chase performance.
I will not chase performance.

On second thought, make that 1,000 times. Performance chasing often ends in tears.
Yes, performance chasing has never worked out for me. And yet I too was sucked into the Cathie Wood hype last year and bought some ARKK and ARKW. I didn't hold long, as it just kept going down, and I had a feeling 2022 would start very badly for tech/growth.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by james22 »

nedsaid wrote: Tue Jan 25, 2022 9:13 pmWrite on a chalkboard 100 times. . .

I will not chase performance.
I will not chase performance.
I will not chase performance.

On second thought, make that 1,000 times. Performance chasing often ends in tears.
Funny, I don't see this admonition in the Small Value or International threads.
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by minimalistmarc »

james22 wrote: Wed Jan 26, 2022 1:19 pm
nedsaid wrote: Tue Jan 25, 2022 9:13 pmWrite on a chalkboard 100 times. . .

I will not chase performance.
I will not chase performance.
I will not chase performance.

On second thought, make that 1,000 times. Performance chasing often ends in tears.
Funny, I don't see this admonition in the Small Value or International threads.
International has performed?
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Re: Why the disdain for managed funds like ARKK that destroy total market funds?

Post by SilverSmurfer »

impatientInv wrote: Mon Jan 24, 2022 2:25 pm Ark selectively removing YTD and 1Y performance from it's website.

Image
https://ark-funds.com/funds/arkk/
Wow.
Only a true believer would look beyond that.
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