Daily Charts - Active Management is Hard.
From 2000 to 2022, only 24% of the stocks in the index outperformed the average stock. Over the period, the average return on an S&P 500 stock was 390%, while the median stock rose by just 93%.
Most years over 50% of Large-Cap US Equity managers trail the benchmark, in bad years over 80% trail the benchmark/ETF equivalent. 60% of managers trailed the S&P 500 through the half way point of 2023.
You can outperform in the short run but it is difficult to consistently outperform. Look at the right hand side, most underperform. You must also ask yourself if you can pick and find the outperforming ~10%.
Small and Mid Cap markets seem to be more inefficient and those focused specifically on growth. Too much competition in the large caps.
Globalization and automation came for blue collar jobs, AI is coming for white collar professions.
Insurers ramping up allocations to private debt and direct lending. They hope to lend at double digit rates as banks continue to pull back and maintain some downside protection being up the capital structure.
A government shutdown in the US would mean almost 1M workers furloughed.
The largest share of young adults living with a parent since the 1940s. Probably has to do with the cost of housing.
Nearly half of all outstanding federal student loan debt is being held by only 10% of borrowers who are holding debt of $80k or more. As payments resume, it may only be that 10% of borrowers who are hit hard. 54% of borrowers have less than $20k of debt.
Chrome is the dominant web browser.
Energy equities have not kept up with the price of the commodity.
Oil in inflation adjusted terms would need to go to about $200 a barrel to reach the highs of 2007.
Looking at prices at the pump, prices would have to almost double, if you are looking at prices in real terms. Not so bad.
High energy costs are bad for industry. Ask the Germans who are still feeling the effects of an energy crisis.
Jeff Currie, exiting Head of Commodities at Goldman, leaving us with his lessons learned.
2022 saw the old economy re-emerge. 2023 has been dominated by the magnificent 7. Where are we headed over the next decade?
