[DesertCat]

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Now, if Warren Buffet said that an intelligent person who used the value investing style could not only beat the index but also Berkshire Hathaway (and value inveting is inherently less subject to fluctuation than the normal index) than a good value minded fund manager should easily overcome the 2% or so MER and deliver good long term performance. The handicap of huge holdings is much less than BRK anyway. This type of fund should easily beat the index.


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I guess you must have some vested interest in selling clients mutual funds (i.e. fees) as you are just not listening.

Buffett has said that a good individual value investor can beat Berkshire's performance. By this he means someone investing only a few million, or maybe tens of millions, but not hundreds of millions.

Buffett does not think this exact same person could reliably beat the S&P 500 if he was forced to invest hundreds of millions or billions in a MUTUAL FUND STRUCTURE! We've told you over and over and over again the problems with this structure.

Clearly Bill Miller is a great example who's an exception to this rule. But he's not very likely to beat the S&P going forward, not with the huge fund he's stuck with. Bill's very good, and he's been very lucky. He is not likely to be both for another ten years.

Buffett has recommended some mutual funds in the past, but those funds are long since closed to keep themselves small and limit the mutual fund handicap on their returns. Buffett no longer recommends any mutual funds, including Bill Miller's. He recommends Index funds.

I'm sorry you don't get as big a fee for selling index funds, but it's in your clients best interest to do so.