[gvibes]

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80% of managers don't beat the market, that also means that 20% do. if there are 10,000 mutual funds out there surely you can find 4 or 5 that consistently outperform the market over the longhaul. miller/freeney/wanger for stocks, gross/fuss bonds all have outperformed their benchmarks.

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Correct me if I'm wrong, but I believe the number of funds who outperform their indicies is actually LOWER than a random distribution would suggest.

E.G., say that there are 100,000 funds, and every fund has a 20% chance to outperform its index (completely randomly). After 5 years, a random distribution would suggest that 100,000/5^5 = 32 funds would have outperformed their index every year for the last five.

However, in real life, you would typically see LESS than 32 funds who have outperformed their index over that period.

So, in other words, these "consistently outperforming" funds could be nothing more than the expected result of variance.

Or the guy could be brilliant - who knows?