reading Four pillars of investing,question on book

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jack1719
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reading Four pillars of investing,question on book

Post by jack1719 » Mon Aug 22, 2011 11:20 am

Wonderful book,very bogle-like,dont time market,dont think your smarter than market..you cant beat market on consistant basis..

unless you run pension fund..

He seems to plug pension funds has only thing that on consistant basis can/has beat the market?If you look at returns as whole,they are excellent..

Why is it? is it cause of the size of them,they can get instituational pricing much lower than me and you?lower fees the reason?I dont think active managers is reason why,cause he seems very against active management..

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wjo
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Post by wjo » Mon Aug 22, 2011 2:41 pm

I think Bill Bernstein plugs pensions as they take allow for professional management of retirement money...Bill has a low opinion of the ability of most individuals to successfully manage their investments. (We are our own worst enemy, etc.)

The other advantage pensions have is pooling of mortality risk, increasing the payout that can be safely made to an individual. This is the same reason SPIA (annuities) can have a payout rate higher than what is considered a SWR for an individual portfolio.

livesoft
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Re: reading Four pillars of investing,question on book

Post by livesoft » Mon Aug 22, 2011 2:47 pm

jack1719 wrote:...
He seems to plug pension funds has only thing that on consistant basis can/has beat the market?If you look at returns as whole,they are excellent..

Why is it? is it cause of the size of them,they can get instituational pricing much lower than me and you?lower fees the reason?I dont think active managers is reason why,cause he seems very against active management..
I think pension funds benefit from folks dying and their pension payouts stopping. In that sense, they have an annuity-like component.
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jack1719
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Re: reading Four pillars of investing,question on book

Post by jack1719 » Mon Aug 22, 2011 8:59 pm

livesoft wrote:
jack1719 wrote:...
He seems to plug pension funds has only thing that on consistant basis can/has beat the market?If you look at returns as whole,they are excellent..

Why is it? is it cause of the size of them,they can get instituational pricing much lower than me and you?lower fees the reason?I dont think active managers is reason why,cause he seems very against active management..
I think pension funds benefit from folks dying and their pension payouts stopping. In that sense, they have an annuity-like component.
If thats the case then Social security should in a sense have a surplus,how many people pay into SS for 40 years,then pass away before age 62,and never get cent out what they put in...but SS is not a long term investment startegy,its really ponzi scheme..which hurts it over long term unlike a pension fund..

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Ice-9
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Post by Ice-9 » Mon Aug 22, 2011 9:29 pm

In Four Pillars, Dr. Bernstein notes that pension funds have the highest paid pros. I think he writes about them to make this point (p.86):
Four Pillars of Investing wrote:If the nation's largest mutual funds and pension funds, with access to the very best information, analysts, and computational facilities, cannot successfully pick stocks and managers, what do you think your chances are?

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