Tyco

Well, any serious investor ought to be sufficiently diversified, as it greatly reduces the risk of losing all your money/equity. So that means you need to keep tabs on 30+ companies, in order to avoid operational/custodial risk (ie. the fact that you could lose a lot of money because you weren't paying enough attention, for instance if you did not fill out a form to claim your cash dividend or whatever). If you invest into an equities fund, they do all that for you.

Also, say you have strong convictions about investing, but not granular enough to pick individual stocks. Like if you believe a certain industry sector is going to generally perform well. Instead of guessing what stocks are sensitive to this sector, you can just put your money in a fund whose managers share your convictions.


So the appeal of fund managers is not hard to see. This still leaves the unsettling statistic of funds under performing the market after fees. I suppose one answer might be that the 'market average' is skewed upwards by highly volatile stocks which have rocketed in price. Portfolio managers would tend to avoid these types of stock because generally they want to keep the risk/volatility of their portfolios low, to remove the chance of complete disaster. Maybe if you picked a bunch of stocks at random from within 1 or 2 standard deviations of the market median price, then compared their performance against the returns from equity funds, the funds would look better.

Another thing to consider is that if you removed all equity fund managers from the market, the market itself would change. Hedge funds etc. do a lot of research into the companies they invest in (or short), essentially acting as critics/judges on the quality of companies and their management. They then affect the price of those stocks through their buying and selling, ultimately ensuring that stocks in general are priced more and more accurately. If this wasn't the case, then solo investors would fall victim to overvalued prices more easily.

Interesting fact I heard the other day: the total cost of the bailout given to the banks in 2008/9, at most could be valued at about £700 million.

That's less than the tax revenue from 'the city' (London's financial sector) in 2007 alone.

Note that I haven't verified this claim. Thought it was a perspective we rarely hear on the news, though.

“A few silicon valley entrepreneurs admired Ayn Rand’s philosophy, and they like made computers, and banks like used computers, yeah?, and the banks messed up while they were using computers, yeah?, so therefore the financial crisis was caused by silicon valley disciples of Ayn Rand, oh and also by Alan Greenspan who was like best friends with Rand, and was in control of the Federal Reserve, so he presumably tried to implement Randian concepts while in power, yeah?, and that like allowed the financial sector to coast towards disaster, irrevocable catastrophic disaster that is worse than anything else in history and any possible alternative, yeah?, it even happened ten years prior in south-east Asia, who suffered terrible consequences for Westernizing their economy, yeah? and presumably haven't recovered since and are still much worse off than ever before, in fact China helped mastermind the current financial crisis as revenge on the US, yeah? and even right now as we type our thoughts are being commodified by the silicon valley Randian oligarchs, yeah?”

“A few silicon valley entrepreneurs admired Ayn Rand’s philosophy, and they like made computers, and banks like used computers, yeah?, and the banks messed up while they were using computers, yeah?, so therefore the financial crisis was caused by silicon valley disciples of Ayn Rand, oh and also by Alan Greenspan who was like best friends with Rand, and was in control of the Federal Reserve, so he presumably tried to implement Randian concepts while in power, yeah?, and that like allowed the financial sector to coast towards disaster, irrevocable catastrophic disaster that is worse than anything else in history and any possible alternative, yeah?, it even happened ten years prior in south-east Asia, who suffered terrible consequences for Westernizing their economy, yeah? and presumably haven't recovered since and are still much worse off than ever before, in fact China helped mastermind the current financial crisis as revenge on the US, yeah? and even right now as we type our thoughts are being commodified by the silicon valley Randian oligarchs, yeah?”

It's regretful that there exists doctrines to lure young men into evil jihad, it's regretful that he planned terrorists attacks, it's regretful that countless lives have been lost trying to apprehend him, regretful that soldiers had to take up arms and extinguish a life at all. When the situation concludes (OBL dying is sort of the conclusion), my overriding impression of the entire affair is one of sadness.

When you read the paper and you see that a murderer has been executed in a state prison, do you crack a big smile and feel the need to celebrate? I doubt it. When I read such things, I feel regret that justice needed to be done like this (even though it was fair), compounded perhaps with relief (that there's one less danger in the world) and quiet approval. But certainly not joy or delight.

If there is a decent explanation for this rather disturbing statement by Rand (that the average person has worst sins in their life than child-murder) I expect somebody would have stated it clearly by now. As such I chalk this up to a bad mistake by Rand that fortunately does not seem to have tainted/influenced her later writings. Nobody is above making a mistake, especially in thought/writing. But what is more worrying is that seemingly few members of this forum are willing to admit there is any problem (and yes one that should invoke an 'emotional response' in any well adjusted person).

If there is a decent explanation for this rather disturbing statement by Rand (that the average person has worst sins in their life than child-murder) I expect somebody would have stated it clearly by now. As such I chalk this up to a bad mistake by Rand that fortunately does not seem to have tainted/influenced her later writings. Nobody is above making a mistake, especially in thought/writing. But what is more worrying is that seemingly few members of this forum are willing to admit there is any problem (and yes one that should invoke an 'emotional response' in any well adjusted person).