Advisor Blog

Home
Categories
Tags
Bloggers
Search
Login

Username Password
Remember me

The Quest for Alpha - The Holy Grail of Investing

Posted by Brent Everett on Thursday, August 18, 2011 in Unconventional Wisdom

I picked up Larry Swedroe's excellent new book, The Quest for Alpha - The Holy Grail of Investing, at the local bookstore last week. Swedroe is the Director of Research at The Buckingham Family of Financial Services and has previously written several very good books on investing. Outside of academic journals, this book offers the most compelling and complete evidence-based case for passive investment that I have found.

Most arguments against active management use data from mutual funds to make the point that the vast majority of actively managed funds underperform their benchmarks. That's important, but what about the evidence from pension plans, hedge funds, private equity, individual investors, and behavioral finance? Swedroe covers each topic and cites numerous academic studies in each area.

"The search for alpha is dominated by the "wizards of advertising" - and, for relatively sophisticated investors, by the "wizards of overconfidence." -- John A. Haslem, Professor Emeritus of Finance, University of Maryland

"...a clear and concise message that is supported by decades of research" -- Dr. William Reichenstein, CFA, Professor of Finance, Baylor University

If you've read The Investment Answer, this book is an excellent next step in your education process - it's listed in the library section of our website where you can click on the picture of the book's cover to purchase it through Amazon. We've discussed the evidence based on mutual funds previously, but in subsequent articles, we'll examine the evidence from other sources presented here.

Tags: active management, behavioral finance, hedge funds, mutual funds, passive management

Brent Everett

Brent Everett founded Profisys, LLC, a fee-only Registered Investment Advisor, in 1998. While acting as Managing Director of that firm, he developed the investment philosophy and the portfolio models currently used by Talis Advisors. He earned a B.S. in Computing and Information Sciences from Oklahoma State University. Mr. Everett’s background includes experience in strategic marketing, executive management and investor relations at Texas Instruments, Samsung Semiconductor, EDI, CSCI, and his own consulting practice. Brent served on the Board of Directors for CSCI, where he helped structure and negotiate management's successful purchase of the company.

Mr. Everett has been a member of the Financial Planning Association, where he was elected to the Board of Directors of the local chapter, the International Association of Financial Engineers, the Econometrics Society, the Association of Pension Professionals and Actuaries Benefits Council, the Estate Planning Council of North Texas and Mensa. He has discussed small cap stock investing on CNNfn and his views regarding investment advisor disclosure have been quoted by several major publications. Along with Scott Maxwell, Brent has been the cohost of The Peaceful Wealth Radio Hour on CNN. He was named as one of Texas Monthly magazine's "5 Star" wealth managers in 2010 and 2011 and one of D Magazine's top wealth managers in 2010.

Mr. Everett lives in Plano with his wife and their Labrador Retreiver. He has served as a member of the Business and Professional Leadership Committee of the Plano Symphony Orchestra, and enjoys reading, fly fishing, college sports, and Formula One racing.