Ann: Funds Under Management - September 2022, page-122

But I'm not a genius? Why do you keep saying it takes a genius as a non-stockholder?

I avoided disasters such as Magellan, Babcock, non-tier 1 commodity producers, Shopify and so forth by asking a few simple questions:

• Is this business a business that is sustainable? Can Magellan run without Hamish Douglass?
• Is this company making an active effort to diversify while money is pouring into its core business (global equities)? Or is management engaging in hubris by relying on a one-trick pony?
• Is this business playing it smart by keeping funds aside or paying out most of its net income to shareholders?
• Does this business have a sustainable debt load?

Magellan failed on most of these aspects. In fact I saw from a mile away at $40+ that this business was literally riding on alpha and an egotistical personality for a moment, and then I saw that right during COVID - I remember the exact date 23 March 2020 - Magellan went to cash AT THE BOTTOM and then deployed back in very late into the game.

For all its expertise and ability to get CIA directors for interviews in podcasts, they can't really invest that well, can they?

Also on what basis do you say "3-5%" returns? Please prove this to me. 3-5% returns for what? I am SO confused.

Here are the returns for Vanguard's S&P 300 VAS ETF as at 13 October. Nearly 10% total after fees even after this market correction we've seen.



And here is iShares's IVV S&P 500 ETF



So where is this 3-5% returns? I don't understand? Also how do you even contrast that to CPI running at 7-10%? To tell people to invest based on what CPI is running it as financially suicidal advice.

The fact of the matter is most people are going to need to take a lifestyle hit when inflation is running that high. Unless you're like my dad with a government-adjusted pension, your investments aren't simply going to "spring into action" and help you keep your earnings power. It's going to hurt and what will make it worse is chasing companies with dividend yields of 10% which is simply a myth long-term.

The best thing a wise investor can do is be prudent with these markets and not pay insane amounts of money to managers who have lost their Midas touch.