Rowan states active management has failed to beat the index 85% of the time for twenty years.
“If you look at the active management, active management has failed to beat the index 85% of the time for twenty years.”
Rowan states active management has failed to beat indexes 85% of the time over twenty years and will get harder.
“If you look at the active management, active management has failed to beat the index 85% of the time for twenty years.”
Rowan says 100% of returns this year came from 10 stocks at 50 PE, which few would actively buy.
“A 100% of our returns this year are from 10 stocks which constitute 35% of the S and P that traded an average PE of 50.”
Rowan predicts a private company index will exist alongside the S&P 500.
“It will not surprise me that we end up with an S and P 500 index and an index of companies that are private.”
Rowan attributes active managers' failure to beat indexes to market structure changes, not lack of skill.
“Most active managers have failed to beat the index 90% of the time for twenty years. I don't think it's a result of lack of effort or intelligence.”
Rowan argues ten companies now represent nearly 50% of S&P 500, all concentrated on one trend.
“Have 10 companies today who account for nearly 50% of the S and P 500, and those 10 companies are all levered to one trend.”