Here is a list of the biggest & popular gainers in the last decade:
1 Priceline.com (PCLN) up 4,962%
2 Apple (AAPL) up 4,962%
3 FLIR Systems (FLIR) up 3,789%
4 Urban Outfitters (URBN) up 3,599%
5 Cliffs Natural Resources (CLF) up 2,671%
6 Southwestern Energy (SWN) up 2,601%
7 Cognizant Technology (CTSH) up 2,285%
8 CarMax (KMX) up 1,663%
9 Coach (COH) up 1,507%
10 Intuitive Surgical (ISRG) up 1,407%
These top ten growers share one thing in common -- they completely transformed their industries with innovative products and ideas.
But remember industry leadership changes. New Trends and Trend Setters emerge. 1990’s decade winners are totally different than what we saw in 2000 decade. And next 10 year winners are going to change again.
Sunday, December 26, 2010
Saturday, December 18, 2010
CRAY stock analysis
Cray plays in HPC (High Performance Computing) technology market – delivering SuperComputers. Supercomputers deliver performance far beyond server capabilities to address challenging scientific, economic, engineering and national security computing problems. For such systems total cost of ownership is very important factor as Cray delivers full end to end solution to its customers.
Stock analysts don’t like stocks like CRAY for its volatile financial, as results fluctuate significantly from Q-to-Q. Cray has few sets of customers who don’t buy equipment every Q. Government research funding has huge impact on CRAY revenues, and given economic situation, research funds won’t be abundantly available. This negativity was heavily reflected in reduced scope with DARPA agreements in first 9 months of 2010. For Cash flow – I believe company is struggling heavily to balance operating cash flows. Again due to large inventory cost for XT6/XE6 systems, and slow lead cycles for customer purchases, managing cash flow is challenge for the company. Gross margins and revenues face erratic predictability. Any attempts from management to stabilize its forecast will be liked by financial community.
Cray specializes its technologies in interconnects, packaging and Software. Cray invests in R&D to design custom high end supercomputers and expects growth through gain in market share & organic growth of high end supercomputer market segment.
New Cray XTm systems – Cray XT6 (Q2’ 10) & Cray XE6 (Q3’ 10). Q4’ 10 bookings are extremely important metric to watch for. Company partners with AMD & Nvidia for computing solutions but has plans to integrate Intel solutions in XE6 product family. Given Nvidia & AMD GPUs have beaten Intel in multi-core performance by huge leap. Cray offers unique capabilities in high-speed, high bandwidth system interconnect design, compiler technology, system software and packaging capabilities. In addition to competition in high end HPC segment, Lower end supercomputers based on Intel, AMD computation with commodity networking solutions are putting pricing pressure for high end vendors such as CRAY. Though these systems could offer better “peak performance/ $$”, often customers face longer lead times for “time to solution”. Often commodity processor solutions create system bottlenecks for network data transfer rates & create unbalanced systems resulting in lower productivity for complex applications. High end HPC vendors often use custom FPGA accelerators or GPU accelerators to augment compute requirements with custom programming models, thus offering better performance, power & data throughput from these systems.
XT/XE product introductions are savior for the company and company will be able to secure additional wins with expanding solutions to more customers. Company is offering services, and new high performance data storage solutions as well.
Though economic factors could impact purchase of high end systems in research community, pressure from China in HPC supremacy could provide some relief in funding. Overall, I believe company has decent product lineup for a good 2011 revenue increase. Company has plans to expand its product lineup & services business, which is overall good for growth of company.
Company has only $68M in cash, with current ratio of 1.36, its decent cash situation for sustaining. But company needs to continually invest in R&D, and given cash situation could hamper its chances for any inventory requirements or growth R&D spending. Company management needs to raise cash more.
Earnings forecast:
As shown in chart below, company had really bad years in 2007, 2008, 2009, but things are starting to look better for 2010, 2011. Company has a good chance to get back in black now.
In terms of stock performance, company survived its near death with Stock touching lows of $1.15 in Nov 2008. Since then stock recovered to 9.49, for a 725% run up in Aug 2009. For several months stock has been range bound between $4.50 & $7.50. February earnings are key to the stock performance. Stock has been making ascending low’s indicating market thinks bottom line for company is improving. I’ll watch for stock to break its previous high of $7.70 to bet back to $9.25 range in 2011. CRAY is Sun alike high flier stocks of 2000, with all time high of $65, which is not coming anytime soon in my opinion. Company has changed completely from old business model.
Overall I personally will use CRAY as short term trading stock than long term buy and hold.
Stock analysts don’t like stocks like CRAY for its volatile financial, as results fluctuate significantly from Q-to-Q. Cray has few sets of customers who don’t buy equipment every Q. Government research funding has huge impact on CRAY revenues, and given economic situation, research funds won’t be abundantly available. This negativity was heavily reflected in reduced scope with DARPA agreements in first 9 months of 2010. For Cash flow – I believe company is struggling heavily to balance operating cash flows. Again due to large inventory cost for XT6/XE6 systems, and slow lead cycles for customer purchases, managing cash flow is challenge for the company. Gross margins and revenues face erratic predictability. Any attempts from management to stabilize its forecast will be liked by financial community.
Cray specializes its technologies in interconnects, packaging and Software. Cray invests in R&D to design custom high end supercomputers and expects growth through gain in market share & organic growth of high end supercomputer market segment.
New Cray XTm systems – Cray XT6 (Q2’ 10) & Cray XE6 (Q3’ 10). Q4’ 10 bookings are extremely important metric to watch for. Company partners with AMD & Nvidia for computing solutions but has plans to integrate Intel solutions in XE6 product family. Given Nvidia & AMD GPUs have beaten Intel in multi-core performance by huge leap. Cray offers unique capabilities in high-speed, high bandwidth system interconnect design, compiler technology, system software and packaging capabilities. In addition to competition in high end HPC segment, Lower end supercomputers based on Intel, AMD computation with commodity networking solutions are putting pricing pressure for high end vendors such as CRAY. Though these systems could offer better “peak performance/ $$”, often customers face longer lead times for “time to solution”. Often commodity processor solutions create system bottlenecks for network data transfer rates & create unbalanced systems resulting in lower productivity for complex applications. High end HPC vendors often use custom FPGA accelerators or GPU accelerators to augment compute requirements with custom programming models, thus offering better performance, power & data throughput from these systems.
XT/XE product introductions are savior for the company and company will be able to secure additional wins with expanding solutions to more customers. Company is offering services, and new high performance data storage solutions as well.
Though economic factors could impact purchase of high end systems in research community, pressure from China in HPC supremacy could provide some relief in funding. Overall, I believe company has decent product lineup for a good 2011 revenue increase. Company has plans to expand its product lineup & services business, which is overall good for growth of company.
Company has only $68M in cash, with current ratio of 1.36, its decent cash situation for sustaining. But company needs to continually invest in R&D, and given cash situation could hamper its chances for any inventory requirements or growth R&D spending. Company management needs to raise cash more.
Earnings forecast:
As shown in chart below, company had really bad years in 2007, 2008, 2009, but things are starting to look better for 2010, 2011. Company has a good chance to get back in black now.
In terms of stock performance, company survived its near death with Stock touching lows of $1.15 in Nov 2008. Since then stock recovered to 9.49, for a 725% run up in Aug 2009. For several months stock has been range bound between $4.50 & $7.50. February earnings are key to the stock performance. Stock has been making ascending low’s indicating market thinks bottom line for company is improving. I’ll watch for stock to break its previous high of $7.70 to bet back to $9.25 range in 2011. CRAY is Sun alike high flier stocks of 2000, with all time high of $65, which is not coming anytime soon in my opinion. Company has changed completely from old business model.
Overall I personally will use CRAY as short term trading stock than long term buy and hold.
Friday, September 10, 2010
Intel Stock - Tech Winter Rally
I studied the Intel's stock price history for last 5 years. And its hard to say what tech winter rally means for Intel stock? For this year, stock has been plummeting after acquisition of McAfee and lower Sales / Earnings guidance.
Stock returns have been very random in last 5 years during tech winter rally period
Stock returns have been very random in last 5 years during tech winter rally period
Wednesday, August 18, 2010
Visa (V) ready for big movement
Upside target = $87.5
Downside target = $60
Factors affecting Price Movement:
* Bearish: Combine with market nervousness of September as "down month", I am inclining more towards bearish camp.
* Bearish: Obama financial reform for credit card companies could impact sector, though visa is in more immune than credit card companies.
Friday, July 9, 2010
Sunday, May 9, 2010
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Past performance is not indicative of future results. MarTek doesn’t guarantee any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment discussed on this website or on the show. Strategies or investments discussed may fluctuate in price or value. Investors may get back less than invested. Investments or strategies mentioned on this website or on the show may not be suitable for you. This material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned on this website or on the show. Before acting on information on this website or on the show, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.
All opinions expressed by MarsTek on this website and on the show are solely Author’s opinions. You should not treat any opinion expressed by MarsTek as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. MarsTek’s opinions are based upon information he considers reliable, neither He, nor his affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. MarsTek’s statements and opinions are subject to change without notice.
Past performance is not indicative of future results. MarTek doesn’t guarantee any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment discussed on this website or on the show. Strategies or investments discussed may fluctuate in price or value. Investors may get back less than invested. Investments or strategies mentioned on this website or on the show may not be suitable for you. This material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned on this website or on the show. Before acting on information on this website or on the show, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.
ALU heading back to $1.25 again???
ALU is again on shaky grounds and I am concerned that ALU may be heading back to $1-$1.25 range. It broke down support of $2.58 last week. It will find another support at $2.0 before it starts its downward draft to $1.09 again. I’ll be watching $2 support carefully, if it falls through the cracks, that won’t be good news to longs.
Looking historically, since 2000, ALU has mostly been in downward trend. 2004 run up gave some hopes to investors but that was it. Since then stock has been mired by Management problems and Economy. And it touched all time low of $1.09 in March 2009 with rest of market. Run-up from March to Oct was impressive when stock gave 5bagger.
In last couple of years ALU won several major contracts including NTT DOCOMO, China Mobile & several others. But stock has done worse and worse, making several investors wonder – what is going on?
When company announced its earnings recently this Quarter, stock plunged 11% in international markets. Economy and component shortages are to be blamed for missing revenue expectations & wider losses.
Company has several deals in back-pocket to be not overly concerned over growth. But company needs to execute better to meet its growing demand, management was overly concerned over economics to squeeze operations. Recovery in economy has took whole telecom industry by surprise and ALU is not the only one falling short to meet customers demand. ALU is getting punished because it could not improve margins in low interest rate environments. Management is not managing company resources everywhere. Company has ample cash, but it makes me worried if management is not executing well. ALU balance sheets are too bad for investors to digest that company should enjoy any good price premiums.
Overall I think $1.25 is remote possibility, but I won't rule out fall to $2.0 this summer where it could be good accumulation price
Saturday, May 8, 2010
GLD Analysis $119.5 resistance
GLD has remain range bound for a while, and good news is that momentum is building very nicely. GLD is heading towards resistance near its all time high of $119.54 where it will have to breakout to head towards $132-$148 range.
Past 3 years charts shows that it takes several tries for GLD to break out. So I expect the resistance to be non-trivial. I’d wait for breakout before opening new position in GLD. For holders of GLD, it might be prudent to put a moving stop order in case GLD doesn’t break out.
AMD Stock Analysis showing $5 to $18 range
Lots of growth investors seem to be cursing wall-street for valuing AMD ~1.0X P/S with 5.8B in revenues and good results lately. If everything were good with AMD, stock should be valued at $13-$18. But I think it could fall to $5 or even lower as I’d describe in the article today. But let me first explain you what’s going behind the numbers.
First of all I’d like to give credit to AMD management for cleaning up their act!! AMD has become an interesting story and lots of people think its undervalued. How can you blame them? If you look at common knowledge measures, it does look under valued.
Several investors have been severely burned by AMD fall from $40 in 2006 to $2 in Feb 2009. In 2009, company was struggling with huge debt hanging off the balance sheet & measly cash left to sustain life. Since then after management changes, AMD has been cleaning its books including Global foundries deconsolidation. Last November company hit a jackpot with huge payoff from Intel lawsuit. Before GF deconsolidation there was 9.3Billion liabilities hanging off the chest of AMD. AMD has cleaned books to reduce liabilities to 4.4B.
Today AMD still has $2.5B debt hanging in books. It doesn’t have sufficient cash/ current assets to pay off all the debt immediately. But management has been able to convince wall-street & Wall-street has handsomely rewarded stock since then ($2-$8.50 = 325% runup!). The remaining debt has hampered the growth opportunities a bit for AMD. Management has been carefully watching costs and profitability. Results show in Q1 AMD grew slower than rest of Computation/ Graphics industry. Both Intel & Nvidia revenues grew much more in Q1 than AMD compared to Q4 last year (so called seasonal slow down). I think AMD must have put the Intel 1.25B jackpot to payoff some of debt.
Here are some comparative numbers I wanted readers to consider:
VALUATION MEASURES | AMD | INTC | Nvidia |
Market Cap (intraday)5: | 5.92B | 117.82B | 7.91B |
Price/Sales (ttm): | 1.01 | 3.11 | 2.42 |
Price/Book (mrq): | 7.34 | 2.77 | 2.99 |
Profitability | |||
Profit Margin (ttm): | 18.16% | 16.15% | -2.04% |
Operating Margin (ttm): | -1.60% | 29.69% | -5.04% |
Management Effectiveness | |||
Revenue (ttm): | 5.80B | 38.28B | 3.33B |
Qtrly Revenue Growth (yoy): | 33.70% | 44.10% | 104.20% |
Gross Profit (ttm): | 2.27B | 19.56B | 1.18B |
% Gross Profit/ revenue | 39.1% | 195.7% | 282.2% |
Total Cash (mrq): | 1.93B | 16.34B | 1.73B |
Total Debt (mrq): | 2.76B | 2.38B | 24.45M |
Current Ratio (mrq): | 2.03 | 2.66 | 3.16 |
Given high P/B ratio, AMD will remain sensitive to market economy gyrations, which could bring stock down to $5 if stock gets attention of Short side Sellers. If P/B is brought to levels of Intel/ Nvidia, stock could be cut in half from here. Which is 45-60% drop. Today stock is valued at 7X Book value which is much higher than industry. Higher valuation shows that street is convinced that management can fix the balance sheets more this year.
Company operations are generating enough money to pay off current debts. But it could take company a long time to pay off debts. Its not growing fast enough to convince the wall-street otherwise. Everybody is in wait & watch mode. Company is not growing as much as competition (Nvidia, Intel), Company is higher debts and gross margins are very poor. Management should look into suing Intel again to raise funds more quickly?? After all they were very successful last time J
All in all I consider AMD as a speculative bet, with lower downside potential and huge upside. Its great company to watch. In next quarters keep an eye on balance sheets in addition to revenue/ margin growths. If company executes well, stock could go $13-$18, but if they flounder, $5 will be in plates. Momentum charting also shows that stock could fall at $5, so I won’t rule out completely for this summer if “sell in may & go away” plays out.
Other day I published charts for $5 targets : http://0c18bf18.linkbucks.com
Friday, May 7, 2010
Disney - The great bull run not over yet.... journey from $32.50 to $44
The market turmoil on 5/6/10 sent DIS stock tumbling 12% intraday lows to $31.00, that was 17% price correction from local peak of $37.98. It was a great buying opportunity today if Markets will let you hold on to any lucky buys you did during turmoil today.
Disney has been trading close to 20% above its 200 day moving average. With recent turmoil, I expect DISNEY to consolidate near $32.50 during summer time & should hit $44 this year.
Disney has been trading close to 20% above its 200 day moving average. With recent turmoil, I expect DISNEY to consolidate near $32.50 during summer time & should hit $44 this year.
Fundamentals look good for DIS, only watchout I'd have is that DIS must improve its operating margins.
Speculations around Dow 1000 intraday crash!
There are lots of speculations surfacing around what caused Dow 1000 point intraday loss.
A computerized selloff possibly caused by a simple typographical error triggered one of the most turbulent days in Wall Street history Thursday and sent the Dow Jones industrials to a loss of almost 1,000 points, nearly a tenth of their value, in less than half an hour. It was the biggest drop ever during a trading day.
No one was sure what happened, other than automated orders were activated by erroneous trades. May be a Fat Fingered Trader! Duh!! One possibilility being investigated was that a trader accidentally placed an order to sell $16 billion, instead of $16 million, worth of futures, and that was enough to trigger sell orders across the market.
The Dow recovered two-thirds of the loss before the closing bell, but that was still the biggest point loss since February of last year. The lightning-fast plummet temporarily knocked normally stable stocks such as Procter & Gamble to a tiny fraction of their former value and sent chills down investors' spines.
No one was taking blame, either. The New York Stock Exchange said there was no problem with the Big Board's systems, and all the markets were on a conference call with the Securities and Exchange Commission.
Nasdaq issued a statement two hours after the market closed saying it was canceling trades that were executed between 2:40 p.m. and 3 p.m. that it called clearly erroneous. It did not, however, mention a cause of the plunge.
The NYSE also said it would cancel some trades on its electronic platform.
The SEC issued a statement saying regulators are reviewing what happened and "working with the exchanges to take appropriate steps to protect investors."
Whatever started the selloff, automated computer trading intensified the losses. The selling only led to more selling as prices plummeted and traders tried to limit their losses.
During researching on story I learned about GPGPUs allowing sophisticated financial analytics programs. Which sophisticated traders write computerized algorithms to trade on live data making split second decisions. Here is a link to site explaining GPGPUs:
Other speculations surfaced were around Greece situation getting worse, Dollar loosing ground to Yen. One noticeable move was in bond markets TLT (iShares Lehman 20+ Year Treas.Bond ETF) crossing $100, where intraday 10 year bond yields fell to 3.25% before recovering.
It was a massive goof up today and SEC must get answers fast!
A computerized selloff possibly caused by a simple typographical error triggered one of the most turbulent days in Wall Street history Thursday and sent the Dow Jones industrials to a loss of almost 1,000 points, nearly a tenth of their value, in less than half an hour. It was the biggest drop ever during a trading day.
No one was sure what happened, other than automated orders were activated by erroneous trades. May be a Fat Fingered Trader! Duh!! One possibilility being investigated was that a trader accidentally placed an order to sell $16 billion, instead of $16 million, worth of futures, and that was enough to trigger sell orders across the market.
The Dow recovered two-thirds of the loss before the closing bell, but that was still the biggest point loss since February of last year. The lightning-fast plummet temporarily knocked normally stable stocks such as Procter & Gamble to a tiny fraction of their former value and sent chills down investors' spines.
No one was taking blame, either. The New York Stock Exchange said there was no problem with the Big Board's systems, and all the markets were on a conference call with the Securities and Exchange Commission.
Nasdaq issued a statement two hours after the market closed saying it was canceling trades that were executed between 2:40 p.m. and 3 p.m. that it called clearly erroneous. It did not, however, mention a cause of the plunge.
The NYSE also said it would cancel some trades on its electronic platform.
The SEC issued a statement saying regulators are reviewing what happened and "working with the exchanges to take appropriate steps to protect investors."
Whatever started the selloff, automated computer trading intensified the losses. The selling only led to more selling as prices plummeted and traders tried to limit their losses.
During researching on story I learned about GPGPUs allowing sophisticated financial analytics programs. Which sophisticated traders write computerized algorithms to trade on live data making split second decisions. Here is a link to site explaining GPGPUs:
Other speculations surfaced were around Greece situation getting worse, Dollar loosing ground to Yen. One noticeable move was in bond markets TLT (iShares Lehman 20+ Year Treas.Bond ETF) crossing $100, where intraday 10 year bond yields fell to 3.25% before recovering.
It was a massive goof up today and SEC must get answers fast!
Thursday, May 6, 2010
AMD Heading to $5 but a great buy!!
http://78c09e81.linkbucks.comAMD is heading towards $5 but is a great buy. Here is how I analyze this stock:
Charts:
Charts show that AMD is going to face resistance at 200day moving average. But if you notice it left gap around $5 on Nov 12, 2009 after $500M settlement with Intel. I think AMD will fill this gap if market remains negative this summer.
Valuations:
Valuations look great at moment. With Current PE at ONLY 7.5 with forward looking at 13.5, P/S ratio hovering around 1.0, its a cheap cheap stock.
My Plan: I'll start buying AMD if it falls below $6.
Charts:
Charts show that AMD is going to face resistance at 200day moving average. But if you notice it left gap around $5 on Nov 12, 2009 after $500M settlement with Intel. I think AMD will fill this gap if market remains negative this summer.
Valuations:
Valuations look great at moment. With Current PE at ONLY 7.5 with forward looking at 13.5, P/S ratio hovering around 1.0, its a cheap cheap stock.
My Plan: I'll start buying AMD if it falls below $6.
Returns are small When VIX goes up
When VIX goes up, returns tend to go down (see this article). * Back in March 2009, it was observed The returns on the S&P 500 and the returns on VIX (percentage changes in VIX) were correlated at -67%. The returns on EFA and EEM were correlated to VIX at -43% and -52% respectively. These are high negative correlations and show the danger signal of a rise in VIX.
* During the volatility spike, a very profitable strategy was to sell call options,
Following chart shows recent spike in volatility
TLT - What a great Breakout!!
I believe its heading to $97 and will face resistance there.
Wednesday, April 28, 2010
Cash Hoardings of (some of Tech/misc) Giants
Company | Date Noticed | Cash Reserves | Market Cap |
Microsoft | Q1, 2010 | 54.5B | 270.87B |
Cisco | Q1, 2010 | 50.1B | 155.68B |
Apple | Q1, 2010 | 41.7B | 238.44B |
Google | Q1, 2010 | 31.5B | 167.12B |
Intel | Q1, 2010 | 23.7B | 127.94B |
Qualcomm | Q1, 2010 | 12.6B | 62.66B |
Q1, 2010 | 30.5B | 191.58B | |
Oracle | Q1, 2010 | 23.9B | 130.50B |
HPQ | Q1, 2010 | 51.6B | 125.11B |
Amazon | Q1, 2010 | 7.9B | 62.51B |
Monday, April 19, 2010
30 year returns of "ANY" period in history is surprisingly consistent.
30 year returns of "ANY" period in history is surprisingly consistent.
The chart on left shows a huge run up after recession worries abated in Mach 2009. 1 year volatility is very high but 30 year returns are consistent & volatility low.
Periods of good returns always follow bad & bad follows good.
Reversion to mean
The professors don’t disagree that, historically, the stock market’s returns over various 30-year periods have been surprisingly consistent. Periods of particularly good returns have been followed by subpar ones, and vice versa — a process that statisticians call reversion to the mean. Prof. Jeremy Siegel, also of Wharton, and the author of “Stocks for the Long Run,” is often credited with demonstrating that mean reversion has been at work in the American stock market since 1802.
Working paper : t the University of Chicago Booth School of Business, and Robert F. Stambaugh, a finance professor at the Wharton School of the University of Pennsylvania. A copy is athttp://ssrn.com/abstract=1136847.
Sunday, April 18, 2010
Monday, April 12, 2010
Intel Analysis
I was concerned over pull back to gap left, but with market lifting, Intel is heading to $26-$27 range in next six months. It can go to $30's
From March 2010 analysis:
Intel stock moving towards 23.75 to 24 range in next month or so. At 24 it will face strong resistance. Depending on earnings this Q, Intel could break through from resistance. If that happens, Intel could go to $31.25, with supports @$21.5 & $19.1. Even if Intel doesn’t break thru 24, it will find solid support @19.1
Intel announces earnings on 04/13/10
Thursday, March 11, 2010
Investing in asset Allocation funds
I ran experiments investing random $$ amounts on random 50 incidences from 2005-2010 & consistently found following results for performance:
Janus > Vanguard Wellington > Oakmark > Fidelity balanced
| JDBAX |
| VWELX |
| OAKBX |
| FBALX |
Janus > Vanguard Wellington > Oakmark > Fidelity balanced
Thursday, February 11, 2010
Active vs. Passive Investing
Somehow a simple active portfolio is beating out passive one in my random experiment below.
I think allocation is very important. If I keep #of funds in active portfolio small, I can hope that fund manager will shift "styles" to give better returns. But market beating returns of fund managers is not sustainable in long terms. Academia says that its Extremely rarely fund managers "always" beat underlying indexes! So it will become "picking fund managers" game and you might falter Once and loose all advantage.
I think allocation is very important. If I keep #of funds in active portfolio small, I can hope that fund manager will shift "styles" to give better returns. But market beating returns of fund managers is not sustainable in long terms. Academia says that its Extremely rarely fund managers "always" beat underlying indexes! So it will become "picking fund managers" game and you might falter Once and loose all advantage.
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