Index funds have outperformed active managers 108 to 23, so you should switch back to active managers!?

Index funds have killed hedge funds and active management.   By how much?   It appears 5 to 1 during the period from 2010 to 2015.   The artificial run up caused by the Trump election can only have made this gap worse, since many big investors (Buffett, Soros) have bet against the market recently.   Index funds have only continued to ride the wave of every one else's capital staying in one place.

It's comforting to see the gap--the NY Times reports these numbers from Seth Klarmen, who they say is some kind of wise guy for hedge fund managers.   I've never heard of him, not that I would.   I have friends with real interests.   He's apparently a value investor like Buffet at some place called the Baupost Group (is this a real firm?   Who knows.)   I've got nothing against him.   I can imagine he's a bit frustrated, losing money for his clients day after day, relative to the S&P.

My point, as always, is that these are all dumb guys.   Active investors underperform the index funds because they're nervous, biased, and ill-suited to the humility of knowing they're wrong.  We'll continue to get ripped off by hedge fund managers until we stop equating them with smart people.  More than 50% of active managers are below average, and they all are over a 10-year span, essentially.

Here are some interesting points about why I'm with Soros (in quality if not quantity) shorting the DJIA and the Russian markets:

• Even dumb active investors hate volatility, eventually (it usually takes 2000 or 2007 before they recognize it--recall that most people in the business started after 1990, so they have the false impression that they're talented because EVERY ONE went up from 1990 until April 2000.  That was 10 years of waking up every morning and saying "God, I'm smart!"   When you weren't.  So, it's going to take them awhile to recognize the parallels between US policy under Trump, and "chaos theory."   He's beta out of control.   I'd give them about 75 days, knowing these guys weren't the smartest kids in their classes or CFA exams.   April 28, 2017--watch out.
• Here's something I never thought about--a negative about index funds, quoted from Klarmen (sour grapes, but still interesting).   He says more people have switched to ETFs, and this has kept the big market cap firms artificially big--money follows money when investors chose to mirror the indices.   The result of course, is that Google stays big, even if there're no clothes on that Emperor.   Interesting to think about, and part of the reason that if you'd put all your money in Google in 2010 you'd be way ahead of the rest of us (same obviously if you'd done that in 2000--you'd be WAY ahead of us, or an early Google employee).   And ahead of poor Seth's clients.   And Buffett.   And Soros. 
• And here's a contradiction Seth still hasn't sorted out.   He attributes the reign of the S&P 500 to money flowing out of active management into index funds, at least in part.   But then he excuses himself and his buddies because he says the rush of funds into hedge funds has caused them to underperform, causing "overall returns to sour."  Which is it?   Perhaps just that money is so unequal now that the 50 or so richest funds have no where to go...and they're just dumping billions into whatever overvalued crap--Google or Baupost--they can find.  

My politics are radical left.   I don't care if my short investments against the US and other economies work or not (hey they'll still outperform the hedge fund managers anyway!).   I just want to see imperialist militarist bullies fail.  If a very small step towards income equality results, that would be wonderful.   I'm doing my best to take my share back from the .001%.