When a Market Commentator knows NOTHING

Here is Bob Doll, who apparently knows NOTHING about how investment markets operate.

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This is disturbing stuff. He points out that active managers, collectively, have historically done a bad job of beating the market indexes…..but he thinks this will change in 2014.

He doesn’t realize that it is simply a mathematical inevitability that they lose to the indexes. These managers all buy and sell from each other. When one outperforms, another must underperform. Collectively they are the market index. Once you take away fees, it is a mathematical given that collectively they will under perform the broad market index.

Studies that show “expert stock pickers” collectively don’t outperform the broad market go all the way back to 1932. This is not a new concept, unless you are like Bob Doll and have been wandering around the investment industry for 33 years (as it says in his bio) and have learned absolutely nothing.

It is guys like this that are why I got into the industry 12 years ago. I didn’t want to be tricked into following the advice of someone like this – someone who seems experienced and credentialed, but knows absolutely nothing about what they are doing.