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King Arthur and his court pursued the Holy Grail, the mythical cup or dish used by Jesus at the Last Supper.The financial equivalent of the pursuit of the Holy Grail is the quest for the money managers who will deliver alphareturns above the appropriate risk-adjusted benchmark. The quest for alpha is based on the theory that the markets are inefficient, and smart people working diligently can discover pricing errors the market makes. But there is a competing theory based on about sixty years of academic research. Its premise is that markets are highly efficientthe market price of a security is the best estimate of the right price. If markets are highly efficient, efforts to outperform are unlikely to prove productive after the expenses of the efforts. So which theory is correct?
In The Quest for Alpha, Larry Swedroe presents research, data, and advice from some legendary market gurus to show that it is extremely difficult to outperform the market. Examining the evidence from academic studies on mutual funds, pension plans, hedge funds, private equity/venture capital, individual investors, and behavioral finance, he demonstrates that the markets are indeed highly efficient. Swedroe then explains why investors should instead focus on asset allocation, fund construction, costs, tax efficiency, and the building of a globally diversified portfolio that minimizes, if not eliminates, the taking of idiosyncratic, uncompensated risks.
And to those who ask, "But how do you explain Warren Buffett?" Swedroe's answer is simple. "I tell them if they see Warren Buffett when they look in the mirror, go ahead and seek the holy grail of alpha," he says. "If they don't, give up the quest and play the winner's game."
I really liked this book because it bluntly tells people they're being ripped off by the financial industrial complex and has a lot of good quotes. Read morePublished 1 month ago by Brian G. Ruschel
A must read for retirees as well as those still seeking that holy grail of investing: huge positive alpha. Read morePublished 7 months ago by Charles D. Evans
Bought for husband. He said it was good reading..easy to comprehend and understand..I have no clue. ughh four more words.Published 11 months ago by SUE ACKERMAN
This book is well written and what is advocated includes
1. Buy index funds or ETFs rather than actively managed funds. Read more
There is much more of the same in The Quest for Alpha as Swedroe's previous writings. But it is very important to hear this message over and over with the latest studies and... Read morePublished 20 months ago by Kram Dietherm
I don't give investment advice. I know I can't predict the future and no one can.
I don't like math, but I trust it. It is reliable. Read more
Very well researched book on trying to "beat" the market. I thought the advice of having less market exposure was helpful and understated. Read morePublished on August 7, 2011 by Michael L. Loren
Swedroe does a wonderful job of describing what is important, and what is not, in building and managing individual portfolios. Read morePublished on July 25, 2011 by rta
By far Swedroe's best book, he must use nearly every published quote on why passive investing beats actively managed investing over time, and the approach is very effective. Read morePublished on June 22, 2011 by Karl B