Holman W. Jenkins Jr. Quotes

99% of fund managers demonstrate no evidence of skill whatsoever.

Fund consultants like to require style boxes such as "long-short," "macro," "international equities." At Berkshire our only style box is "smart."

Mutual fund manager performance does not persist and the return of stock picking is zero.

Index investing outperforms active management year after year.

Mutual fund managers are trapped in this rather deadly vicious circle: the more successful they are, the more money flows into their mutual fund. Then, it is more difficult for them to beat the market averages or even to match their own past performance.

Diversification is an established tenet of conservative investment.

The difference between success and failure is not which stock you buy or which piece of real estate you buy, it's asset allocation.

Do you really like a particular stock? Put 10% or so of your portfolio on it. Make the idea count … Good [investment] ideas should not be diversified away into meaningless oblivion.

The deeper one delves, the worse things look for actively managed funds.

Most investors would be better off in an index fund.

As a result of overdiversification, their (active managers) returns get watered down. Diversification covers up ignorance. Active managers haven't done enough research into any of their companies. If managers have 200 positions, do you think they know what's going on at any one of those companies at this moment?

The most important key to successful investing can be summed up in just two words-asset allocation.

There is general agreement among researchers that nearly all stock pickers, whether they know it or not-and few of them do-are playing a game of chance.

... skepticism about past returns is crucial. The truth is, much as you may wish you could know which funds will be hot, you can't - and neither can the legions of advisers and publications that claim they can. That's why building a portfolio around index funds isn't really settling for average. It's just refusing to believe in magic.

There's lots of stocks out there and all you need is a few of 'em. That's been my philosophy.

I have always been very diversified, so I have never suffered a catastrophic loss. I spread my money around the way a large institutional investor does. I use different brokerage firms. I manage some of my accounts myself.

Why tie to gold? Why not 1982 Bordeaux?

When you diversify your mutual funds, you are diversifying something that is already diversified. Diversifying mutual funds is like taking high octane gasoline & adding water & then adding orange juice to it.

Conventional wisdom is not to put all of your eggs in one basket. 80/20 wisdom is to choose a basket carefully, load all your eggs into it, and then watch it like a hawk.

The investment game is getting more and more competitive.

Everybody has a different strategy, but everybody agrees that active management does not beat the market.

When people discover they are no good at baseball or hockey, they put away their bats and their skates and they take up amateur golf or stamp collecting or gardening. But when people discover they are no good at picking stocks, they are likely to continue to do it anyway.

If your fund doesn't last for the long term, how can you invest for the long term?

The scary truth is 96 percent of mutual funds fail to match the market, and the 4 percent that do, they're always changing.

All you need for a lifetime of successful investing is a few big winners, and the pluses from those will overwhelm the minuses from the stocks that don't work out.