Ep. 71: Charley Ellis on Active Investors Underperformance, Index Investing and Character

Dr. Charles D. Ellis is the founder and former managing partner of Greenwich Associates, an international consultancy where he advised large institutional investors, foundations, and government organizations in more than 130 financial markets across the globe. He taught investment management courses at the Yale School of Management and at Harvard Business School. He sat on the Board of Directors of The Vanguard Group. In addition, Charley was a successor trustee of Yale University, where he chaired the university’s investment committee with David Swensen. He is the author of a number of books including Winning the Loser’s Game, which has recently come out in its 8^th edition. In the podcast, we talk about:

1. Why it has become harder for investors to outperform the market
2. The rise of highly professional investors
3. The difficulty of finding good investment managers
4. The poor returns of investment managers
5. The importance of time in assessing performance
6. Market timing versus factor investing
7. The impact of monetary policy on markets
8. The problem with bond investing
9. Outlook for equity returns
10. Understanding your total portfolio
11. Think over long time horizons and importance of character
12. Benefit from intelligence of others through index investing
13. Books/articles that influenced Charley: Warren Buffet’s annual letters, The Theory of Investment Value (John Burr Williams), Common Stocks and Uncommon Profits and Other Writings (Philip Fisher), Security Analysis (Graham and Dodd), Inside the Yield Book (Martin Leibowitz), Pioneering Portfolio Management (David Swensen)

You can find Charley’s work in his book Winning the Losers Games.

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(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)