Consider that 85% of active mutual funds underperformed their benchmark over the 10 years ending 2018.65 That figure has been fairly stable for generations. You would think an industry with such poor performance would be a niche service and have a hard time staying in business. But there’s almost five trillion dollars invested in these funds.

• The muscles of portfolio construction and valuation atrophy, as consensus-driven ‘access’ dominates behavior and idiosyncratic risk falls out of favour.


• The typical ‘power law’ distribution of outputs collapses as few genuine outliers can be realised from a concentrated pattern of investment.


• As returns converge on a mediocre market-rate, investors

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Intro highlights:I believe my lack of business education was an asset because it encouraged me to ask a lot of questions and  to think from first principles.