tag:blogger.com,1999:blog-11906042.post1501743965728520490..comments2024-03-30T00:09:27.602+13:00Comments on Not PC: Welfare for bankers. There’s a lot of it about. [Updated]Peter Cresswellhttp://www.blogger.com/profile/10699845031503699181noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-11906042.post-20111865801659825712010-08-23T11:59:30.010+12:002010-08-23T11:59:30.010+12:00Oops, meant to add PIE as a reason for the advanta...Oops, meant to add PIE as a reason for the advantage disappearing too.Kimblenoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-24836233096681701762010-08-23T11:57:38.463+12:002010-08-23T11:57:38.463+12:00"No active manager has ever out-performed a p..."No active manager has ever out-performed a passive manager after tax according to Bankers Assoc of NZ."<br /><br />Really, where did they say this?<br /><br />Make no mistke, this is a HUGE statement and needs to be referenced if anyone is to take it seriously.<br /><br />The first example that comes to mind is Warren Buffet, a guy who has out-performed passive managers over a very long time.<br /><br />Even locally there are managers who have outperformed a global index over a decent amount of time. Of course, passive management DID have an NZ tax advantage over active management for a long time. But that changed around 3 years ago with FDR and the abolition of the grey-list.<br /><br />In any case, your statement looks flat out wrong and you need to back it up with a link to support it. The fanastical nature of your statement makes it look more likely that you have misunderstood what you have read.Kimblenoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-85018351023831137732010-08-22T15:16:18.587+12:002010-08-22T15:16:18.587+12:00There are 2 types of fund managers - those who man...There are 2 types of fund managers - those who manage to the index (passive) and those who actively manage. No active manager has <b>ever</b> out-performed a passive manager after tax according to Bankers Assoc of NZ. <br /><br />Fund management is a total disgrace. Don't fall for those talking their book!!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-7344839733900059622010-08-21T15:06:26.007+12:002010-08-21T15:06:26.007+12:00Pro-Capitalist, ask yourself this, if fund manager...Pro-Capitalist, ask yourself this, if fund managers are holding themselves up as investing gods that can always pick the right stocks, why do some have portfolios of dozens of stocks? Why do others have portfolios of hundreds?<br /><br />Obviously, if they WERE holding themselves up as such they wouldnt diversify. But they do diversify, which means they recognise the difficulty in picking stocks, picking markets, and timing investment. (Which many people dont.)<br /><br />Investors CAN DIY, sure. And they might very well perform better than managers. But consumers CAN do their own plumbing, fix their own car, cut their own hair, etc. They dont though. They pay someone else to do it. Does that make plumbers, mechanics and hair dressers frauds or that they are ripping people off?<br /><br />I would REALLY like to see any evidence you have on how DIYers perform vs fund managers. I suspect you have misunderstood a number of other studies or put too much stock in small sample anecdotal evidence.<br /><br />I know of studies that show the overall market beats the average manager, and that a monkey once beat a bunch of stock brokers, but there is no real data on fund managers performance against a decent sampling of other private individuals.<br /><br />The average fund manager might under perform the market, but the only way that would mean that they dont beat most other market participants would be if the majority of those participants invested in the whole market. Which they probably dont.<br /><br />It is true that there are many times that the average fund manager under performs the market. But the key word is AVERAGE, it is simply not true that none out-perform it.<br /><br />All anyone has done is rant and whine about stuff they imagine to be true, but on closer inspection is either illogical, ill-considered, a gross stereotype or flat-out wrong.Kimblenoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-57471023133670560752010-08-20T20:06:39.943+12:002010-08-20T20:06:39.943+12:00Kimble, I think that the point Ruth is making is...Kimble, I think that the point Ruth is making is that fund managers try to make out that what they do as somehow special, which in fact, what they do is nothing special at all. Investors can DIY and their returns wouldn't be much that difference from what the so called fund managers are doing and the evidence in the industry have shown that this is the case. <br /><br />Fund managers are nothing more than oracles who take fees for simply playing Russian roulette with people's money and of course they charge substantial fees for that. The main perception in the industry is that somehow they've got special skills (my arse!). They don't have special skills because if that's the case, then they themselves would have been self-made millionaires with those skills without the need to entice the general public & investors to put in their money with them to be managed.<br /><br />Fund managers are all the same. They're more like Madoff. Madoff deliberately defrauded people which is a crime while fund managers defrauded investors by misleading (in that they misleadingly sell themselves or portrayed themselves as oracles which they can read the market) which is in a way perfectly legal. This is the main difference otherwise, one is misrepresentation and the other is illegal so Madoff is no difference to fund managers.Pro-Capitalistnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-17680377640407674392010-08-20T16:32:03.072+12:002010-08-20T16:32:03.072+12:00i don't know where you are getting your figure...i don't know where you are getting your figures from but kiwibank reported a profit of $45.8 million in the 12 months ended June 30 2010.<br /><br />Kiwibank opened for business in February 2002 with NZ$80 million of taxpayer funding via the government. About another NZ$230 million had been pumped in since, via parent NZ Post. So all up Kiwibank had investment of NZ$310 million.<br /><br />retained profits to date total $175million.<br /><br /><br />“The value of the bank today is somewhere between NZ$800 million and NZ$1 billion,” Knowles said<br /><br />“So there’s at least NZ$500 million, if you like, of value that has been created in the eight years I’ve been involved in the bank and that’s a very good return.”<br /><br />ceo Knowles says "taking the broader banking market into consideration, Kiwibank’s existence had prevented somewhere in the vicinity of NZ$1 billion to NZ$2 billion in profits being sent to Australia"<br /><br />i don't know where you are getting your numbers from but everyone knows that kiwibank makes money for our government. because it leveraged a 300+ network of existing nzpost branches nationwide and has secure access to needed capital ensuring a good credit rating.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-16898295441826498642010-08-20T12:19:16.728+12:002010-08-20T12:19:16.728+12:00"However, even the most elementary index trad..."However, even the most elementary index trader and trend follower made a substantial profit in 2009. Everyone except fund managers, it seems."<br /><br />What?<br /><br />No, it doesnt SEEM like that at all. Do you actually KNOW what fund manager returns were for 2009?<br /><br />You too seem to be saying that fund managers should be employed with a very wide mandate to invest wherever they can get the best return. Sure there are hedge funds that can do that, and some wide mandate ordinary funds, but most managers are paid to invest in a particular area, with restrictions on shorting and market exposure. <br /><br />Not all fund managers have a hedge fund mandate. You cant blame them for the preferences of investment style revealed by the market. Index trading trend followers get killed in changeable markets (i.e. when trends shift direction often and severely). Just because that style worked one year doesnt mean it is going to work every time. <br /><br />Fund managers in aggregate dont know in advance what the market was going to do, and therefore which style it would pay to invest in. Nobody does.Kimblenoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-40288186220660198162010-08-19T18:51:05.975+12:002010-08-19T18:51:05.975+12:00Fund managers have long been known as the car sale...Fund managers have long been known as the car salesmen of the finance profession. Fund management has been a culture of mediocrity for the last 30 years. <br /><br />I am sure no one expects them to make positive returns all the time. However, even the most elementary index trader and trend follower made a substantial profit in 2009. Everyone except fund managers, it seems.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-35156842858774111722010-08-19T15:52:37.754+12:002010-08-19T15:52:37.754+12:00"suits who’ve already failed to grow the mone..."suits who’ve already failed to grow the money they’ve been give voluntarily, so that giving them your money by force just looks like rewarding failure."<br /><br />You keep saying this. <br /><br />(Lets ignore that KiwiSaver investment is long-term, and three years is short-term.)<br /><br />Do you really think that all investment managers should be making positive returns all the time? Even when all investment markets fall, do you expect managers to post positive returns?<br /><br />Compulsion issue aside, if you do believe this then, by extension, you demand that every manager should go 100% cash to protect investors money when the markets turn. In which case you want the "failing managers" to have more discretion over the investments they manage.<br /><br />You would, in effect, be ordering those "failures" to try and time the market. Something which few expert investors are able to do successfully.<br /><br />I mean, that train of thought is logical right?<br /><br />Now, if you mean that the managers have lost money over and above what the markets have lost(i.e. they dont earn back their management fee), thats another thing. And it wouldnt be at all surprising if it was true in aggregate. But I dont recall seeing that info anywhere.Kimblenoreply@blogger.comtag:blogger.com,1999:blog-11906042.post-16522793891042114362010-08-19T11:21:20.050+12:002010-08-19T11:21:20.050+12:00Two things here. First, compulsory savings is an o...Two things here. First, compulsory savings is an outrage - it is the nationalisation of workers. If the government wants to increase savings, it can do it one of two ways. One, it can increase interest rates and cut taxes on savings, so as to make saving in New Zealand a rewarding activity, which it currently is not. Or two, it can leave interest rates right where they are and force you to save at, ultimately, the point of a gun. Somehow in our political system, option two is more advantageous than option one.<br /><br />Second, Kiwibank's struggles is evidence of one of two things. Either a) actually its mainly Australian owned competition isn't ripping off New Zealanders - the fees they set are apparently about what's required to run a sustainable business. Or b) governments make bad owners of private goods. Either way, Kiwibank doesn't have a reason for existing. But exist it will because the good ole median voter will quickly dispose of anyone trying to get rid of it.<br /><br />The country is going to hell.mattnoreply@blogger.com