beth nellist

Comments:

• Thank you, Philip, for your thoughtful comments.

  Post: Skill or Luck?

  Link to comment from May 30, 2023

• By BENellist Phillip Stein’s article on Taleb’s books on chance has shaken up my thinking. I withdrew funds on retirement which, invested, then tripled in value over 18 years. But they lost value substantially beginning in 2022 and have only slightly recovered. As Stein points out, I may have been “fooled by randomness” into thinking that my funds were invested well. I don’t follow the markets and don’t know if my recent returns are subpar or not. But Stein, along with many other Humble Dollar writers, might suggest that having only 1/3 of the portfolio in index funds is a major factor in poor performance. (Yet my indexed 1/3 has performed as poorly as my 2/3 non-indexed portfolio). However the specter of random performance having controlled both my successful and unsuccessful years concerns me greatly. Stein says, “you have to keep tabs on actively managed funds to be sure you aren’t getting subpar results.” Of course, but does keeping track necessarily mean tracking and comparing indices to the portfolio? How frequently? And what keeps the indices from performing extra well or extra poorly? If Taleb offers a methodology, in which book? In short, the article produces more questions that deserve discussion.

  Post: Skill or Luck?

  Link to comment from May 28, 2023