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

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Locked
mikeyzito22
Posts: 870
Joined: Sat Dec 02, 2017 4:42 pm

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

Post by mikeyzito22 »

willthrill81 wrote: Tue Dec 14, 2021 3:00 pm
mikeyzito22 wrote: Thu Dec 09, 2021 10:01 pm
Williams57 wrote: Fri May 14, 2021 1:18 pm ARKK invests in "disruptive innovation". Whatever this means, this is what they do. It may or may not beat the market. I own some and I am down net so far. I am not planning to sell. It's a small % of my portfolio. I am not crazy nor bitter about it. Just curious.
“Rule number 1: Never lose money. Rule number 2: Don’t forget rule number 1.”-Warren Buffet.
:sharebeer
I guess that means don't own Buffett's company. It had a -44% drawdown during the GFC and didn't recover until 2013.
Honestly, it was just a cool quote. If the ARKK was held and the previous poster was "net down so far," and is "not crazy bitter about it," I can only hope that the previous poster held in it in his/or hers "disruptive Roth" or deferred account. Good on ya Will.
nigel_ht
Posts: 4742
Joined: Tue Jan 01, 2019 9:14 am

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

Post by nigel_ht »

iamlucky13 wrote: Tue Dec 14, 2021 5:40 pm
dogagility wrote: Fri Dec 10, 2021 2:21 pm
1789 wrote: Fri Dec 10, 2021 1:26 pm About a year ago, a friend told me he bought ARKG to make YOLO. You can guess the rest of the story.
Perhaps you can time the market successfully by doing the opposite of what your friend does... :D
There's an XKCD for that:

https://xkcd.com/2270/
There’s an XKCD for almost everything :)
000
Posts: 8211
Joined: Thu Jul 23, 2020 12:04 am

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

Post by 000 »

They're releasing 3x and -3x ARK ETFs and 5x and -5x QQQ ETFs in Europe: link
User avatar
Taylor Larimore
Posts: 32842
Joined: Tue Feb 27, 2007 7:09 pm
Location: Miami FL

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

Post by Taylor Larimore »

Bwlonge wrote: Sat Feb 13, 2021 5:52 pm I've been looking into the ARK ETFs and this forum is a place I tend to look for financial opinions.

The posts I've seen here, unsurprisingly, have negative sentiments toward ARK funds. Bogleheads are happy to have money in passive low ER funds. I followed that advice for a while but it ended up leaving a ton of money on the table.

Pre-pandemic, 2015-2020, QQQ out performed VTI 117% to 60%. ARKK outperformed VTI 161% to 60%.

What am I missing here? For a 401k or IRA that's going to sit for 30 years, is the total market fund advice really relevant anymore?

By following traditional advice to get the cheapest total market fund, it has ended up costing people thousands of dollars more in opportunity cost.
Bwlonge:

According to Morningstar (this year) ARK has plunged -21,92%. Meanwhile, Total Stock market (VTSAX) has gained +21.86%--a difference of 43.78%.

Yes, the total market fund is still "relevant."

What Experts Say About Total Market Index Funds

Happy Holiday!

Taylor
Jack Bogle's Words of Wisdom: "The beauty of owning the market is that you eliminate individual stock risk, you eliminate market sector risk, and you eliminate manager risk. -- "Never think you know more than the market. Nobody does."
"Simplicity is the master key to financial success." -- Jack Bogle
User avatar
nedsaid
Posts: 19275
Joined: Fri Nov 23, 2012 11:33 am

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

Post by nedsaid »

Taylor Larimore wrote: Fri Dec 17, 2021 7:20 pm
Bwlonge wrote: Sat Feb 13, 2021 5:52 pm I've been looking into the ARK ETFs and this forum is a place I tend to look for financial opinions.

The posts I've seen here, unsurprisingly, have negative sentiments toward ARK funds. Bogleheads are happy to have money in passive low ER funds. I followed that advice for a while but it ended up leaving a ton of money on the table.

Pre-pandemic, 2015-2020, QQQ out performed VTI 117% to 60%. ARKK outperformed VTI 161% to 60%.

What am I missing here? For a 401k or IRA that's going to sit for 30 years, is the total market fund advice really relevant anymore?

By following traditional advice to get the cheapest total market fund, it has ended up costing people thousands of dollars more in opportunity cost.
Bwlonge:

According to Morningstar (this year) ARK has plunged -21,92%. Meanwhile, Total Stock market (VTSAX) has gained +21.86%--a difference of 43.78%.

Yes, the total market fund is still "relevant."

What Experts Say About Total Market Index Funds

Happy Holiday!

Taylor
Jack Bogle's Words of Wisdom: "The beauty of owning the market is that you eliminate individual stock risk, you eliminate market sector risk, and you eliminate manager risk. -- "Never think you know more than the market. Nobody does."
Taylor, I am sure that you agree with me that this thread has not aged well. ARKK had a great run and lots of investors chased hot performance only to find that the fund had turned cold after they bought it. When I learned about the ARK Funds, I was interested but was cautious about buying funds with very hot recent performance. I decided not to invest and my caution was vindicated.

The ARK Funds might be a good long term investment and perhaps Cathy Wood will have a great long term performance as a portfolio manager. History suggests that most managers with such hot performance records suffer from reversion to the mean, something that John Bogle often talked about. I have no recommendation on these funds but there are intriguing ideas behind these funds, that is investing in emerging technologies that will change our world.

In fact, John Bogle Jr., yes THAT John Bogle Jr., ran a Quantitative Small Cap Growth Fund. After a hot and promising start his fund started trailing Vanguard's Small Cap Index after a few years. Dad was right about reversion to the mean though he did invest in his son's fund.

https://assetbuilder.com/knowledge-cent ... es-son-has
A fool and his money are good for business.
User avatar
unclescrooge
Posts: 6265
Joined: Thu Jun 07, 2012 7:00 pm

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

Post by unclescrooge »

HomerJ wrote: Fri Dec 10, 2021 8:45 pm
These managers don't get rich growing their own money over the long run with great investments. They get rich from the FEES.
+1
She's a 65 year old who realized her last shot at real wealth is to make outlandish bets and make up crazy stories, and be on TV incessantly peddled her fund.

It's she was really brilliant, we would have heard of her 30 years ago.
User avatar
Bogle101
Posts: 468
Joined: Mon Oct 01, 2012 10:14 am

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

Post by Bogle101 »

There will always be a small percentage of actively managed mutual funds, private equity funds and other alternative investment funds that beat the market.

The issue is we don’t know who they will be in the future.

So by all means chase that alpha, it’s just very hard to consistently generate and capture that over the long run. Trust me, I desperately wish I had bought QQQ.
40% Extended Market | 40% S&P 500 | 10% REIT | 5% State Muni Bond | 5% Cash
jjonesy
Posts: 10
Joined: Tue Aug 03, 2021 3:09 pm

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

Post by jjonesy »

“We won’t let benchmarks and tracking errors hold our strategies hostage to the existing world order,” Wood wrote. She described the success of the ARK ETFs as one not solely bolstered by fervor for “stay at home” investment opportunities, amid the COVID pandemic, but rooted in identifying paradigm-shifting innovation, from blockchain and bitcoin BTCUSD, +0.83% to electric vehicles.

“Critical to investment success will be moving to the right side of change, avoiding industries and companies caught in the crosshairs of ‘creative destruction’ and embracing those on the leading edge of ‘disruptive innovation,'” Wood wrote.

She sounds like a whackadoo, I would never invest with someone who talks like that.
User avatar
Raymond
Posts: 1884
Joined: Mon Apr 16, 2012 6:04 am

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

Post by Raymond »

I can just picture Ms. Wood (and other fund managers like her) talking in private like Matthew McConaughey's character in the (NSFW) restaurant scene in "The Wolf of Wall Street" :D
"Ritter, Tod und Teufel"
User avatar
anon_investor
Posts: 15122
Joined: Mon Jun 03, 2019 1:43 pm

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

Post by anon_investor »

Bogle101 wrote: Sat Dec 18, 2021 6:40 am There will always be a small percentage of actively managed mutual funds, private equity funds and other alternative investment funds that beat the market.

The issue is we don’t know who they will be in the future.

So by all means chase that alpha, it’s just very hard to consistently generate and capture that over the long run. Trust me, I desperately wish I had bought QQQ.
Or TQQQ? :P
User avatar
abuss368
Posts: 27850
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

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

Post by abuss368 »

Taylor Larimore wrote: Fri Dec 17, 2021 7:20 pm
Bwlonge wrote: Sat Feb 13, 2021 5:52 pm I've been looking into the ARK ETFs and this forum is a place I tend to look for financial opinions.

The posts I've seen here, unsurprisingly, have negative sentiments toward ARK funds. Bogleheads are happy to have money in passive low ER funds. I followed that advice for a while but it ended up leaving a ton of money on the table.

Pre-pandemic, 2015-2020, QQQ out performed VTI 117% to 60%. ARKK outperformed VTI 161% to 60%.

What am I missing here? For a 401k or IRA that's going to sit for 30 years, is the total market fund advice really relevant anymore?

By following traditional advice to get the cheapest total market fund, it has ended up costing people thousands of dollars more in opportunity cost.
Bwlonge:

According to Morningstar (this year) ARK has plunged -21,92%. Meanwhile, Total Stock market (VTSAX) has gained +21.86%--a difference of 43.78%.

Yes, the total market fund is still "relevant."

What Experts Say About Total Market Index Funds

Happy Holiday!

Taylor
Jack Bogle's Words of Wisdom: "The beauty of owning the market is that you eliminate individual stock risk, you eliminate market sector risk, and you eliminate manager risk. -- "Never think you know more than the market. Nobody does."
Jack Bogle is correct. There is a different set of risks with active management.

Indexing works.

Best.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
User avatar
markjk
Posts: 540
Joined: Wed Oct 07, 2020 6:01 am

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

Post by markjk »

jjonesy wrote: Sat Dec 18, 2021 7:06 am “We won’t let benchmarks and tracking errors hold our strategies hostage to the existing world order,” Wood wrote. She described the success of the ARK ETFs as one not solely bolstered by fervor for “stay at home” investment opportunities, amid the COVID pandemic, but rooted in identifying paradigm-shifting innovation, from blockchain and bitcoin BTCUSD, +0.83% to electric vehicles.

“Critical to investment success will be moving to the right side of change, avoiding industries and companies caught in the crosshairs of ‘creative destruction’ and embracing those on the leading edge of ‘disruptive innovation,'” Wood wrote.

She sounds like a whackadoo, I would never invest with someone who talks like that.
:D Remember, this stuff is about marketing as much as anything else. She is playing her marketing hand as best she can to stem the outflows and sound positive. Staying relevant in this industry is hard when your products are losing value. The time is ticking on ARK buzz if they can't get it turned around so there is probably a bit of panic over there.
centrifuge41
Posts: 1317
Joined: Mon May 17, 2010 9:04 am

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

Post by centrifuge41 »

Now that 2021 is a wrap, we see ARKK having its worst year since inception last year, down over 20%. Here's an article.
atdharris
Posts: 2091
Joined: Wed Jan 02, 2019 2:18 pm

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

Post by atdharris »

Another ugly day for ARKK, now off 6% and falling
User avatar
willthrill81
Posts: 32250
Joined: Thu Jan 26, 2017 2:17 pm
Location: USA
Contact:

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

Post by willthrill81 »

atdharris wrote: Tue Jan 04, 2022 9:56 am Another ugly day for ARKK, now off 6% and falling
This thread should be a sticky, a perennial reminder that what seems like a 'sure thing' is generally not that at all.
The Sensible Steward
User avatar
canadianbacon
Posts: 677
Joined: Sun Nov 10, 2019 9:04 pm

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

Post by canadianbacon »

willthrill81 wrote: Tue Jan 04, 2022 10:16 am
atdharris wrote: Tue Jan 04, 2022 9:56 am Another ugly day for ARKK, now off 6% and falling
This thread should be a sticky, a perennial reminder that what seems like a 'sure thing' is generally not that at all.
Reading the Bernstein book reminded me we've been here before. Gerald Tsai, Robert Sanborn, Michael Kassen... Cathie Wood.
Bulls make money, bears make money, pigs get slaughtered.
lostdog
Posts: 5368
Joined: Thu Feb 04, 2016 1:15 pm

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

Post by lostdog »

Update from the OP going 30% ARK?

viewtopic.php?f=10&t=339971&p=5813826#p5813826

"I don't own any ARKs yet, but am planning to go 30% allocation next week, only because I can't allocate more in my 403b."
Last edited by lostdog on Tue Jan 04, 2022 11:12 am, edited 1 time in total.
Stocks-80% || Bonds-20% || Taxable-VTI/VXUS || IRA-VT/BNDW
User avatar
willthrill81
Posts: 32250
Joined: Thu Jan 26, 2017 2:17 pm
Location: USA
Contact:

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

Post by willthrill81 »

lostdog wrote: Tue Jan 04, 2022 11:11 am Update from the OP going 30% ARK?
The OP has been MIA since the end of October.
The Sensible Steward
User avatar
peskypesky
Posts: 1023
Joined: Fri Mar 08, 2013 7:56 pm

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

Post by peskypesky »

willthrill81 wrote: Tue Jan 04, 2022 11:12 am
lostdog wrote: Tue Jan 04, 2022 11:11 am Update from the OP going 30% ARK?
The OP has been MIA since the end of October.
Uh-oh. That's not a good sign.

Well, I jumped on the ARKK train in 2021 myself, and after a few months of losing, I sold at a loss and jumped off. It has just continued to drop since then.

I learned my lesson and am sticking with passive index funds.
User avatar
peskypesky
Posts: 1023
Joined: Fri Mar 08, 2013 7:56 pm

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

Post by peskypesky »

willthrill81 wrote: Tue Jan 04, 2022 10:16 am
atdharris wrote: Tue Jan 04, 2022 9:56 am Another ugly day for ARKK, now off 6% and falling
This thread should be a sticky, a perennial reminder that what seems like a 'sure thing' is generally not that at all.
I concur. This should be stickied.
User avatar
nisiprius
Advisory Board
Posts: 52212
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

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

Post by nisiprius »

canadianbacon wrote: Tue Jan 04, 2022 11:09 am Reading the Bernstein book reminded me we've been here before. Gerald Tsai, Robert Sanborn, Michael Kassen... Cathie Wood.
The problem, of course, is that active managers that fail simply become completely forgotten. I know who Gerald Tsai is. I didn't know and don't remember the names "Robert Sanborn" or "Michael Kessen."

It's hard to learn from history when the active managers who are succeeding are lionized and the active managers who failed are forgotten. And unless you were personally paying attention at the time, you don't appreciate just how widely revered they were, and if you tell people they were, they just dismiss it as the boring story of a boring old guy.

I didn't bookmark it, but I remember someone dismissing the S&P SPIVA reports by saying "Mutual fund customers aren't stupid, they don't invest in the average funds, they know enough to invest in the good ones."
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
User avatar
willthrill81
Posts: 32250
Joined: Thu Jan 26, 2017 2:17 pm
Location: USA
Contact:

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

Post by willthrill81 »

nisiprius wrote: Tue Jan 04, 2022 11:24 am
canadianbacon wrote: Tue Jan 04, 2022 11:09 am Reading the Bernstein book reminded me we've been here before. Gerald Tsai, Robert Sanborn, Michael Kassen... Cathie Wood.
The problem, of course, is that active managers that fail simply become completely forgotten. I know who Gerald Tsai is. I didn't know and don't remember the names "Robert Sanborn" or "Michael Kessen."

It's hard to learn from history when the active managers who are succeeding are lionized and the active managers who failed are forgotten. And unless you were personally paying attention at the time, you don't appreciate just how widely revered they were, and if you tell people they were, they just dismiss it as the boring story of a boring old guy.

I didn't bookmark it, but I remember someone dismissing the S&P SPIVA reports by saying "Mutual fund customers aren't stupid, they don't invest in the average funds, they know enough to invest in the good ones."
Indeed, survivor bias is very real, very alive, and very strong.
The Sensible Steward
User avatar
willthrill81
Posts: 32250
Joined: Thu Jan 26, 2017 2:17 pm
Location: USA
Contact:

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

Post by willthrill81 »

peskypesky wrote: Tue Jan 04, 2022 11:20 am
willthrill81 wrote: Tue Jan 04, 2022 11:12 am
lostdog wrote: Tue Jan 04, 2022 11:11 am Update from the OP going 30% ARK?
The OP has been MIA since the end of October.
Uh-oh. That's not a good sign.

Well, I jumped on the ARKK train in 2021 myself, and after a few months of losing, I sold at a loss and jumped off. It has just continued to drop since then.

I learned my lesson and am sticking with passive index funds.
It wouldn't be surprising if the OP has left due to shame, both personal and concern for receiving it from others. And to be honest, many on this forum have shamed others in the past for deviating from what they believe to be the best. I know because I have been a recipient myself at times, even when my deviations resulted in outperformance, which is partly why I don't discuss my own investment strategy on the open forum any longer, though I continue to discuss it with those genuinely interested via PM.

For better or worse, many here are very militant about the BH principles, certainly much more so than Bogle himself was.
The Sensible Steward
User avatar
peskypesky
Posts: 1023
Joined: Fri Mar 08, 2013 7:56 pm

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

Post by peskypesky »

willthrill81 wrote: Tue Jan 04, 2022 11:30 am For better or worse, many here are very militant about the BH principles, certainly much more so than Bogle himself was.
Well...I personally think they are right to be militant. Almost every single time I have veered from Bogle principles, it was a mistake.

Have I been shamed? Yeah, maybe. But it was deserved. And I'm thankful that this community has been able and willing to guide me... and to try to keep me from acting on bad impulses. I still f up...but this forum brings me back to Bogle principles. It's sort of like a 12-step group in my opinion.
Californiastate
Posts: 1516
Joined: Thu Feb 04, 2021 10:52 am

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

Post by Californiastate »

willthrill81 wrote: Tue Jan 04, 2022 11:30 am
peskypesky wrote: Tue Jan 04, 2022 11:20 am
willthrill81 wrote: Tue Jan 04, 2022 11:12 am
lostdog wrote: Tue Jan 04, 2022 11:11 am Update from the OP going 30% ARK?
The OP has been MIA since the end of October.
Uh-oh. That's not a good sign.

Well, I jumped on the ARKK train in 2021 myself, and after a few months of losing, I sold at a loss and jumped off. It has just continued to drop since then.

I learned my lesson and am sticking with passive index funds.
It wouldn't be surprising if the OP has left due to shame, both personal and concern for receiving it from others. And to be honest, many on this forum have shamed others in the past for deviating from what they believe to be the best. I know because I have been a recipient myself at times, even when my deviations resulted in outperformance, which is partly why I don't discuss my own investment strategy on the open forum any longer, though I continue to discuss it with those genuinely interested via PM.

For better or worse, many here are very militant about the BH principles, certainly much more so than Bogle himself was.
Threads pop up constantly that go against the main BH principle of low cost index funds. Why get surprised when the community voices it's opinion?
User avatar
willthrill81
Posts: 32250
Joined: Thu Jan 26, 2017 2:17 pm
Location: USA
Contact:

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

Post by willthrill81 »

Californiastate wrote: Tue Jan 04, 2022 11:55 am Threads pop up constantly that go against the main BH principle of low cost index funds. Why get surprised when the community voices it's opinion?
peskypesky wrote: Tue Jan 04, 2022 11:44 am
willthrill81 wrote: Tue Jan 04, 2022 11:30 am For better or worse, many here are very militant about the BH principles, certainly much more so than Bogle himself was.
Well...I personally think they are right to be militant. Almost every single time I have veered from Bogle principles, it was a mistake.

Have I been shamed? Yeah, maybe. But it was deserved. And I'm thankful that this community has been able and willing to guide me... and to try to keep me from acting on bad impulses. I still f up...but this forum brings me back to Bogle principles. It's sort of like a 12-step group in my opinion.
It's one thing to reaffirm the BH principles and why they are appropriate.

It's another thing entirely to shame those who disagree. The latter is very often driven by hubris.

We should all strive to have the heart of a teacher. And often, that involves being students ourselves.
The Sensible Steward
Californiastate
Posts: 1516
Joined: Thu Feb 04, 2021 10:52 am

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

Post by Californiastate »

willthrill81 wrote: Tue Jan 04, 2022 12:00 pm
Californiastate wrote: Tue Jan 04, 2022 11:55 am Threads pop up constantly that go against the main BH principle of low cost index funds. Why get surprised when the community voices it's opinion?
peskypesky wrote: Tue Jan 04, 2022 11:44 am
willthrill81 wrote: Tue Jan 04, 2022 11:30 am For better or worse, many here are very militant about the BH principles, certainly much more so than Bogle himself was.
Well...I personally think they are right to be militant. Almost every single time I have veered from Bogle principles, it was a mistake.

Have I been shamed? Yeah, maybe. But it was deserved. And I'm thankful that this community has been able and willing to guide me... and to try to keep me from acting on bad impulses. I still f up...but this forum brings me back to Bogle principles. It's sort of like a 12-step group in my opinion.
It's one thing to reaffirm the BH principles and why they are appropriate.

It's another thing entirely to shame those who disagree. The latter is very often driven by hubris.

We should all strive to have the heart of a teacher. And often, that involves being students ourselves.
Ironic isn't it.
User avatar
HomerJ
Posts: 21281
Joined: Fri Jun 06, 2008 12:50 pm

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

Post by HomerJ »

willthrill81 wrote: Tue Jan 04, 2022 12:00 pm
Californiastate wrote: Tue Jan 04, 2022 11:55 am Threads pop up constantly that go against the main BH principle of low cost index funds. Why get surprised when the community voices it's opinion?
peskypesky wrote: Tue Jan 04, 2022 11:44 am
willthrill81 wrote: Tue Jan 04, 2022 11:30 am For better or worse, many here are very militant about the BH principles, certainly much more so than Bogle himself was.
Well...I personally think they are right to be militant. Almost every single time I have veered from Bogle principles, it was a mistake.

Have I been shamed? Yeah, maybe. But it was deserved. And I'm thankful that this community has been able and willing to guide me... and to try to keep me from acting on bad impulses. I still f up...but this forum brings me back to Bogle principles. It's sort of like a 12-step group in my opinion.
It's one thing to reaffirm the BH principles and why they are appropriate.

It's another thing entirely to shame those who disagree. The latter is very often driven by hubris.

We should all strive to have the heart of a teacher. And often, that involves being students ourselves.
Hmmm...

If you state you have found a better way to invest on Bogleheads than Boglehead principles, and then it blows up in your face, just say you were wrong, and we'll all move on.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
User avatar
willthrill81
Posts: 32250
Joined: Thu Jan 26, 2017 2:17 pm
Location: USA
Contact:

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

Post by willthrill81 »

HomerJ wrote: Tue Jan 04, 2022 11:51 pm
willthrill81 wrote: Tue Jan 04, 2022 12:00 pm
Californiastate wrote: Tue Jan 04, 2022 11:55 am Threads pop up constantly that go against the main BH principle of low cost index funds. Why get surprised when the community voices it's opinion?
peskypesky wrote: Tue Jan 04, 2022 11:44 am
willthrill81 wrote: Tue Jan 04, 2022 11:30 am For better or worse, many here are very militant about the BH principles, certainly much more so than Bogle himself was.
Well...I personally think they are right to be militant. Almost every single time I have veered from Bogle principles, it was a mistake.

Have I been shamed? Yeah, maybe. But it was deserved. And I'm thankful that this community has been able and willing to guide me... and to try to keep me from acting on bad impulses. I still f up...but this forum brings me back to Bogle principles. It's sort of like a 12-step group in my opinion.
It's one thing to reaffirm the BH principles and why they are appropriate.

It's another thing entirely to shame those who disagree. The latter is very often driven by hubris.

We should all strive to have the heart of a teacher. And often, that involves being students ourselves.
Hmmm...

If you state you have found a better way to invest on Bogleheads than Boglehead principles, and then it blows up in your face, just say you were wrong, and we'll all move on.
My post was not targeted at the individual who is questioning the BH principles but rather how the BH community responds to such individuals.
The Sensible Steward
User avatar
HomerJ
Posts: 21281
Joined: Fri Jun 06, 2008 12:50 pm

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

Post by HomerJ »

willthrill81 wrote: Wed Jan 05, 2022 9:50 am
HomerJ wrote: Tue Jan 04, 2022 11:51 pm
willthrill81 wrote: Tue Jan 04, 2022 12:00 pm
Californiastate wrote: Tue Jan 04, 2022 11:55 am Threads pop up constantly that go against the main BH principle of low cost index funds. Why get surprised when the community voices it's opinion?
peskypesky wrote: Tue Jan 04, 2022 11:44 am
willthrill81 wrote: Tue Jan 04, 2022 11:30 am For better or worse, many here are very militant about the BH principles, certainly much more so than Bogle himself was.
Well...I personally think they are right to be militant. Almost every single time I have veered from Bogle principles, it was a mistake.

Have I been shamed? Yeah, maybe. But it was deserved. And I'm thankful that this community has been able and willing to guide me... and to try to keep me from acting on bad impulses. I still f up...but this forum brings me back to Bogle principles. It's sort of like a 12-step group in my opinion.
It's one thing to reaffirm the BH principles and why they are appropriate.

It's another thing entirely to shame those who disagree. The latter is very often driven by hubris.

We should all strive to have the heart of a teacher. And often, that involves being students ourselves.
Hmmm...

If you state you have found a better way to invest on Bogleheads than Boglehead principles, and then it blows up in your face, just say you were wrong, and we'll all move on.
My post was not targeted at the individual who is questioning the BH principles but rather how the BH community responds to such individuals.
Seems like a lot of us say "Man, we did the same thing back in the day... Here's why it's a bad idea" which doesn't seem to be shaming.

I myself invested with hot funds, like Janus, and picked individual stocks back in the late 1990s when every stock was going up, so I felt like a genius.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
atdharris
Posts: 2091
Joined: Wed Jan 02, 2019 2:18 pm

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

Post by atdharris »

I really should learn to cut my losses on ARKK and just get out. Down 5% on the shares I bought in fall 2020 and ARKK continues to drop into 2022. Not a big percentage of my portfolio (now ~3.5% of my taxable account), but it still is a drag.
Californiastate
Posts: 1516
Joined: Thu Feb 04, 2021 10:52 am

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

Post by Californiastate »

atdharris wrote: Wed Jan 05, 2022 10:54 am I really should learn to cut my losses on ARKK and just get out. Down 5% on the shares I bought in fall 2020 and ARKK continues to drop into 2022. Not a big percentage of my portfolio (now ~3.5% of my taxable account), but it still is a drag.
It depends on what you plan on doing with the proceeds. Will you chase the next hot investment?
atdharris
Posts: 2091
Joined: Wed Jan 02, 2019 2:18 pm

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

Post by atdharris »

Californiastate wrote: Wed Jan 05, 2022 11:24 am
atdharris wrote: Wed Jan 05, 2022 10:54 am I really should learn to cut my losses on ARKK and just get out. Down 5% on the shares I bought in fall 2020 and ARKK continues to drop into 2022. Not a big percentage of my portfolio (now ~3.5% of my taxable account), but it still is a drag.
It depends on what you plan on doing with the proceeds. Will you chase the next hot investment?
I would just roll them into VTI. I like to have 5-10% of my total NW for speculation, and while that worked tremendously in 2020, in 2021, I got slaughtered.
Lock
Posts: 98
Joined: Sat Oct 05, 2019 8:52 pm

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

Post by Lock »

willthrill81 wrote: Tue Jan 04, 2022 12:00 pm
Californiastate wrote: Tue Jan 04, 2022 11:55 am Threads pop up constantly that go against the main BH principle of low cost index funds. Why get surprised when the community voices it's opinion?
peskypesky wrote: Tue Jan 04, 2022 11:44 am
willthrill81 wrote: Tue Jan 04, 2022 11:30 am For better or worse, many here are very militant about the BH principles, certainly much more so than Bogle himself was.
Well...I personally think they are right to be militant. Almost every single time I have veered from Bogle principles, it was a mistake.

Have I been shamed? Yeah, maybe. But it was deserved. And I'm thankful that this community has been able and willing to guide me... and to try to keep me from acting on bad impulses. I still f up...but this forum brings me back to Bogle principles. It's sort of like a 12-step group in my opinion.
It's one thing to reaffirm the BH principles and why they are appropriate.

It's another thing entirely to shame those who disagree. The latter is very often driven by hubris.

We should all strive to have the heart of a teacher. And often, that involves being students ourselves.
I agree with this mindset and also feel that it has resulted in my decreased participation in these forums. Jack had novel ideas - are we so bold as to thinking that there can be no further improvements/strategies? Shouldn’t we at least support the discussion and discourse of such ideas?
Californiastate
Posts: 1516
Joined: Thu Feb 04, 2021 10:52 am

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

Post by Californiastate »

Lock wrote: Wed Jan 05, 2022 11:46 am
willthrill81 wrote: Tue Jan 04, 2022 12:00 pm
Californiastate wrote: Tue Jan 04, 2022 11:55 am Threads pop up constantly that go against the main BH principle of low cost index funds. Why get surprised when the community voices it's opinion?
peskypesky wrote: Tue Jan 04, 2022 11:44 am
willthrill81 wrote: Tue Jan 04, 2022 11:30 am For better or worse, many here are very militant about the BH principles, certainly much more so than Bogle himself was.
Well...I personally think they are right to be militant. Almost every single time I have veered from Bogle principles, it was a mistake.

Have I been shamed? Yeah, maybe. But it was deserved. And I'm thankful that this community has been able and willing to guide me... and to try to keep me from acting on bad impulses. I still f up...but this forum brings me back to Bogle principles. It's sort of like a 12-step group in my opinion.
It's one thing to reaffirm the BH principles and why they are appropriate.

It's another thing entirely to shame those who disagree. The latter is very often driven by hubris.

We should all strive to have the heart of a teacher. And often, that involves being students ourselves.
I agree with this mindset and also feel that it has resulted in my decreased participation in these forums. Jack had novel ideas - are we so bold as to thinking that there can be no further improvements/strategies? Shouldn’t we at least support the discussion and discourse of such ideas?
I’d suggest Reddit for a more malleable crowd.
User avatar
Mel Lindauer
Moderator
Posts: 35782
Joined: Mon Feb 19, 2007 7:49 pm
Location: Daytona Beach Shores, Florida
Contact:

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

Post by Mel Lindauer »

Perhaps part of the problem is in response to the rather provocative OP
Why the disdain for managed funds like ARKK that destroy total market funds?
DESTROY total market funds?
Best Regards - Mel | | Semper Fi
bikechuck
Posts: 1473
Joined: Sun Aug 16, 2015 9:22 pm

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

Post by bikechuck »

willthrill81 wrote: Tue Jan 04, 2022 11:30 am
It wouldn't be surprising if the OP has left due to shame, both personal and concern for receiving it from others. And to be honest, many on this forum have shamed others in the past for deviating from what they believe to be the best. I know because I have been a recipient myself at times, even when my deviations resulted in outperformance, which is partly why I don't discuss my own investment strategy on the open forum any longer, though I continue to discuss it with those genuinely interested via PM.

For better or worse, many here are very militant about the BH principles, certainly much more so than Bogle himself was.
Willthrill, I have always enjoyed and learned from your posts and it is unfortunate that you have decided to no longer discuss your investment strategy on this forum. If the Bogleheads Forum becomes a space where people hold back to avoid being shamed it will no longer have the thought provoking educational value that it once did for me and so many others.
User avatar
steve roy
Posts: 1855
Joined: Thu May 13, 2010 5:16 pm

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

Post by steve roy »

Them that lives by the cheeky header, dies by the cheeky header.

My reaction was that he was trolling for comments … and got them.
User avatar
willthrill81
Posts: 32250
Joined: Thu Jan 26, 2017 2:17 pm
Location: USA
Contact:

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

Post by willthrill81 »

bikechuck wrote: Wed Jan 05, 2022 12:08 pm
willthrill81 wrote: Tue Jan 04, 2022 11:30 am
It wouldn't be surprising if the OP has left due to shame, both personal and concern for receiving it from others. And to be honest, many on this forum have shamed others in the past for deviating from what they believe to be the best. I know because I have been a recipient myself at times, even when my deviations resulted in outperformance, which is partly why I don't discuss my own investment strategy on the open forum any longer, though I continue to discuss it with those genuinely interested via PM.

For better or worse, many here are very militant about the BH principles, certainly much more so than Bogle himself was.
Willthrill, I have always enjoyed and learned from your posts and it is unfortunate that you have decided to no longer discuss your investment strategy on this forum. If the Bogleheads Forum becomes a space where people hold back to avoid being shamed it will no longer have the thought provoking educational value that it once did for me and so many others.
You can only imagine how many posts had to be removed for being personal attacks on me in the thread where I discussed my strategy. Eventually, I abandoned that thread altogether (not my strategy, which was erroneously stated as such by a mod when the thread was closed) because I got tired of the vitriol.

Overall, this group is certainly better than most such forums, but the nature of electronic mediated communication is such that it lends itself to overly aggressive behavior.
The Sensible Steward
Valuethinker
Posts: 49030
Joined: Fri May 11, 2007 11:07 am

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

Post by Valuethinker »

HomerJ wrote: Wed Jan 05, 2022 10:32 am

Seems like a lot of us say "Man, we did the same thing back in the day... Here's why it's a bad idea" which doesn't seem to be shaming.

I myself invested with hot funds, like Janus, and picked individual stocks back in the late 1990s when every stock was going up, so I felt like a genius.
Didn't you pick me up in a rainstorm in 1999?

Something to do with Morgan Stanley? You were the truck driver ... who owned that whole island? Or was that me who had the island?

:sharebeer
Valuethinker
Posts: 49030
Joined: Fri May 11, 2007 11:07 am

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

Post by Valuethinker »

canadianbacon wrote: Tue Jan 04, 2022 11:09 am
willthrill81 wrote: Tue Jan 04, 2022 10:16 am
atdharris wrote: Tue Jan 04, 2022 9:56 am Another ugly day for ARKK, now off 6% and falling
This thread should be a sticky, a perennial reminder that what seems like a 'sure thing' is generally not that at all.
Reading the Bernstein book reminded me we've been here before. Gerald Tsai, Robert Sanborn, Michael Kassen... Cathie Wood.
Neil Woodford (UK fund manager who raised £14bn based on his previous performance at Invesco-Perpetual, and then imploded).

Bill Gross of PIMCO & latterly, Janus.

2 very clever people who did incredibly well for a long time, then imploded.
Valuethinker
Posts: 49030
Joined: Fri May 11, 2007 11:07 am

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

Post by Valuethinker »

unclescrooge wrote: Sat Dec 18, 2021 12:50 am
HomerJ wrote: Fri Dec 10, 2021 8:45 pm
These managers don't get rich growing their own money over the long run with great investments. They get rich from the FEES.
+1
She's a 65 year old who realized her last shot at real wealth is to make outlandish bets and make up crazy stories, and be on TV incessantly peddled her fund.

It's she was really brilliant, we would have heard of her 30 years ago.
Actually I think she is a little more dangerous than that.

She's someone who thinks she is right, and believe that a divinity is guiding her hand...

In politics, such people have a truly terrible record. Think Machiavelli's bete noire -- Savaranola, who briefly turned Renaissance Florence into a theocracy.

Oliver Cromwell was another divinely inspired gentleman. He still divides British opinions - but the Irish have a fairly firm view.

https://en.wikipedia.org/wiki/Siege_of_Drogheda
User avatar
willthrill81
Posts: 32250
Joined: Thu Jan 26, 2017 2:17 pm
Location: USA
Contact:

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

Post by willthrill81 »

Mel Lindauer wrote: Wed Jan 05, 2022 12:06 pm Perhaps part of the problem is in response to the rather provocative OP
Why the disdain for managed funds like ARKK that destroy total market funds?
DESTROY total market funds?
steve roy wrote: Wed Jan 05, 2022 12:25 pm Them that lives by the cheeky header, dies by the cheeky header.

My reaction was that he was trolling for comments … and got them.
Fair enough, but we should always be careful to not respond to 'cheekiness' with the same. Again, we need to always strive for the heart of a teacher.
The Sensible Steward
User avatar
Yesterdaysnews
Posts: 964
Joined: Sun Sep 14, 2014 1:25 pm
Location: Sugar Land, TX

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

Post by Yesterdaysnews »

The rise of these “investing messiahs” seems common in late stage mega bull cycles…. Cathy Wood, Chamath etc are just the latest version.
bogledogle
Posts: 656
Joined: Wed May 07, 2014 4:34 pm

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

Post by bogledogle »

willthrill81 wrote: Tue Jan 04, 2022 11:30 am
It wouldn't be surprising if the OP has left due to shame, both personal and concern for receiving it from others. And to be honest, many on this forum have shamed others in the past for deviating from what they believe to be the best. I know because I have been a recipient myself at times, even when my deviations resulted in outperformance, which is partly why I don't discuss my own investment strategy on the open forum any longer, though I continue to discuss it with those genuinely interested via PM.

For better or worse, many here are very militant about the BH principles, certainly much more so than Bogle himself was.
+1

I agree. It is intimidating to have advice screamed at you if you are a new member around here.
User avatar
willthrill81
Posts: 32250
Joined: Thu Jan 26, 2017 2:17 pm
Location: USA
Contact:

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

Post by willthrill81 »

Yesterdaysnews wrote: Wed Jan 05, 2022 2:39 pm The rise of these “investing messiahs” seems common in late stage mega bull cycles…. Cathy Wood, Chamath etc are just the latest version.
I don't know. Peter Lynch rose to great prominence in the middle of the great stock run in the 1980s and 1990s.
The Sensible Steward
User avatar
nisiprius
Advisory Board
Posts: 52212
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

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

Post by nisiprius »

Valuethinker wrote: Wed Jan 05, 2022 1:03 pm Neil Woodford (UK fund manager who raised £14bn based on his previous performance at Invesco-Perpetual, and then imploded).

Bill Gross of PIMCO & latterly, Janus.

2 very clever people who did incredibly well for a long time, then imploded.
Woodford imploded.

Gross at Janus underperformed US bond index funds, lost his reputation as a genius, and dethroned himself as "bond king,"

But someone who invested $10,000 in Gross's Janus fund at inception and sold at any time during his tenure would never have lost more than -$320, could have made as much as $650, and overall made $207. I don't think I would call that an "implosion."

Blue, Gross's bond fund at Janus while he was managing it; Red, Vanguard total bond.

https://www.portfoliovisualizer.com/fun ... 019]Source

Image
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
User avatar
nisiprius
Advisory Board
Posts: 52212
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

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

Post by nisiprius »

Who was the investing genius anointed "manager of the year," more than once, I think?

Ken Heebner. CGM Focus. It is really hard to believe or remember just how the press talked about him. Fortune, 2008
The best mutual fund manager around - a.k.a. Ken Heebner of Capital Growth Management - looks restless. He is sitting in a conference room at Goldman Sachs's Boston office, listening to a young analyst pontificate about all the trends he thinks will sweep the markets in coming years... Heebner couldn't care less. His flagship fund, CGM Focus (CGMFX), has already made a killing on energy and agriculture, and Heebner has no patience for the pet theories of this or any other analyst (or economist or strategist)... Fox mentions that sovereign wealth funds are diversifying out of bonds and bank bailouts and into broad portfolios of common stocks....

Heebner is one of the few fund managers who routinely engages in short-selling, and the prospect of a couple of trillion dollars flooding the equity markets should be enough to give any short-seller pause. Immediately Heebner is peppering Fox with questions...

Fox shouldn't feel too bad: Heebner is multiple steps ahead of everyone these days....

Just how good has Heebner been? We may well be witnessing the most dazzling run of stock picking in mutual fund history....
Since publication of the article, the fund has lost money. The CGM Focus Fund (CGMFX)'s dazzling run (blue) is compared to Vanguard Total Stock (red).

Source

Image
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
Escapevelocity
Posts: 1145
Joined: Mon Feb 18, 2019 7:32 am

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

Post by Escapevelocity »

canadianbacon wrote: Tue Jan 04, 2022 11:09 am
willthrill81 wrote: Tue Jan 04, 2022 10:16 am
atdharris wrote: Tue Jan 04, 2022 9:56 am Another ugly day for ARKK, now off 6% and falling
This thread should be a sticky, a perennial reminder that what seems like a 'sure thing' is generally not that at all.
Reading the Bernstein book reminded me we've been here before. Gerald Tsai, Robert Sanborn, Michael Kassen... Cathie Wood.
you forgot Garrett Van Wagoner
User avatar
canadianbacon
Posts: 677
Joined: Sun Nov 10, 2019 9:04 pm

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

Post by canadianbacon »

Escapevelocity wrote: Wed Jan 05, 2022 5:45 pm
canadianbacon wrote: Tue Jan 04, 2022 11:09 am
willthrill81 wrote: Tue Jan 04, 2022 10:16 am
atdharris wrote: Tue Jan 04, 2022 9:56 am Another ugly day for ARKK, now off 6% and falling
This thread should be a sticky, a perennial reminder that what seems like a 'sure thing' is generally not that at all.
Reading the Bernstein book reminded me we've been here before. Gerald Tsai, Robert Sanborn, Michael Kassen... Cathie Wood.
you forgot Garrett Van Wagoner
Can't forget what you never knew! But yes, fits the pattern well!

https://www.institutionalinvestor.com/a ... 1990s-Icon
Bulls make money, bears make money, pigs get slaughtered.
Locked