Use the incessant annual/interim articles to help you identify which PMs/funds are the ones that consistently outperform their benchmarks.

That is the problem in a nutshell, though. There are virtually no funds--perhaps none at all--that consistently outperform their benchmarks, especially in the large-cap U.S. stock space. Even the best funds often have lumpy performance, and many investors, including investors on this board, can't psychologically handle that lumpy performance when the fund is having a bout of significant underperformance. In fact, the lack of consistency is one reason the stats of underperformance versus the S&P 500 long-term are so high. The fund that outperforms the S&P 500 this year will very rarely be the same as the fund that outperforms it in the next. Meanwhile the fee drag of active management is consistent year after year and is utterly predictable. It is the most predictable thing about active management. Over time the outperformance of big up years can't overcome the cumulative effect of that fee drag for almost every large-cap fund. And even when the fund can overcome the fee drag many of its investors don't enjoy it because psychologically they buy and sell the fund at the wrong times, chasing its hot performance and bailing out of it at the bottom.
I would add that the referenced PRWAX has also not consistently beaten its benchmark even in calendar years, let alone rolling ones. Morningstar benchmarks it against a Large Growth index and T. Rowe benchmarks it against the Russell 3000. In both cases, there are lagging years:
https://troweprice.com/financial-intermediary/us/en/investments/mutual-funds/us-products/all-cap-opportunities-fund.html In fact, the fund has lagged its T. Rowe-chosen Russell 3000 benchmark in both 2022 and 2021 as well as 2016 and 2014--lumpy but strong overall performance.
Fun Trivia question: What fund manager holds the record for beating the S&P 500 the most consecutive calendar years in a row? The old-timers here should know. The answer in a way explains why you can't really put much faith in most active managers long-term.
Finally, I would note that the best use of a consistent alpha metric--as opposed to an intermittent alpha one--might be for identifying fraud. There is probably something fishy going on with a fund that beats its benchmark every single year. I bet Madoff had some really high alpha.

This post is NOT in direct response to ANY particular prior post.
So we're near the end of two pages of discussion on this topic and not ONE time has the term "alpha" been stated and no attempts have been made to assert its relevance/importance in this discussion. (Another reason why I generally find worthless the annual/interim discussions of the performance of all stock funds vs indexes.)
So then...
https://www.investopedia.com/terms/a/alpha.asp
Excerpt:
What Is Alpha?
Alpha (α) is a term used in investing to describe an investment strategy's ability to beat the market, or its "edge." Alpha is thus also often referred to as “excess return” or “abnormal rate of return,” which refers to the idea that markets are efficient, and so there is no way to systematically earn returns that exceed the broad market as a whole. Alpha is often used in conjunction with beta (the Greek letter β), which measures the broad market's overall volatility or risk, known as systematic market risk.
Alpha is used in finance as a measure of performance, indicating when a strategy, trader, or portfolio manager has managed to beat the market return over some period. Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index or benchmark that is considered to represent the market’s movement as a whole.
The excess return of an investment relative to the return of a benchmark index is the investment’s alpha. Alpha may be positive or negative and is the result of active investing. Beta, on the other hand, can be earned through passive index investing.
Please temporarily couch your bias for/against Zack's. Just using a page of theirs below to illustrate the relevance/importance of it in this discussion, and in the scoping of funds that consistently outperform benchmarks.
https://www.zacks.com/stock/news/2079438/is-t-rowe-price-all-cap-opportunities-fund-prwax-a-strong-mutual-fund-pick-right-now?cid=CS-YAHOO-FT-mutual_fund_equity_report-2079438
Excerpt:
Risk Factors
With a 5-year beta of 1, the fund is likely to be as volatile as the market average. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. Over the past 5 years, the fund has a positive alpha of 2.72. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

https://fundresearch.fidelity.com/fund-screener/results/compare/overview/averageAnnualReturnsYear3/desc/1?order=&tickers=PRWAX,FXAIX
FWIW, PRWAX beats the S&P for ALL SIX YTD-to-Life interim periods. We are current and LT holders of PRWAX (drumroll) because of its alpha and those results.
Bottom Line: Use the incessant annual/interim articles to help you identify which PMs/funds are the ones that consistently outperform their benchmarks. Avoid concentrating on the headline news that, um, duh, most of them don't.

Nicholas Fund. Third ave value. Sogen international. Mutual shares. Of course Fidelity Magellan. Those are just the ones I can remember. But they come and they go.

CNN/Money, THE BEST MUTUAL FUNDS Here Are the Pros' Choices for the Next Decade, October 12, 1987.
The text is presented in a single, unbroken, stream of sentences, so I don't recommend reading. A few highlights:
"Although the managers we interviewed were divided on when a market downturn would come, almost all agreed that one is long overdue. When it does happen, many fear stock prices could sink 20% to 40%".
The dateline of the piece is Oct 12, 1987. Black Monday was exactly one week later, when the Dow dropped 22.6% in a single day. That was after selloffs Oct 14-16 that resulted in the Dow declining 4.6%.
https://www.federalreservehistory.org/essays/stock-market-crash-of-1987
Results:
1. VWNDX, then managed for 23 years by John Neff (age 56). Had a wide lead over #2 winner.
2. MUTHX, then managed by Max Heine and Michael Price (age 36). Money says that Price had been managing with Heine for 13 years, which would date back to his joining Heine Securities in 1975. Money also describes Price as the principal manager. But the 1995 prospectus for the fund says that Price had been managing the day-to-day operations for five years (i.e. starting around 1990).
" In contrast to our top two funds, both of which employ a primarily conservative (and contrarian) approach, eight of the top 10 ... are either aggressive growth or long-term growth funds."
3. NICSX - managed by founder
3. (tie) ACRNX - managed by founder, Ralph Wanger
5. SEQUX - managed by founder
6. PENNX
7. Evergreen Fund - managed by founder
This fund is hard to trace. Evergreen funds were owned by First Union Corp. (banking company), which merged into Wachovia in 2001, which was acquired by Wells Fargo in 2008. Somewhere along that line the Evergreen fund may have gotten renamed or merged into another Evergreen or Keystone fund.
Evergreen was so scandal-ridden (e.g. 2001-2003 trading abuses, 2008 ultra short bond mispricings), not to mention merely being owned by Wells Fargo, that it's no surprise one cannot find a trace of it now. I especially like the lead in the CBS piece on the ultrashort bond fund: "There's really only one word that can be used to describe people who engaged in the sorts of activities Evergreen is accused of: crooks."
8. FMAGX. "(up 1,795% to July 1 [for past 10 years], compared with 590% for Windsor). ... . One of the reasons for Magellan's downgrading is that the fund, like many growth seekers that remain fully invested in stocks at all times, is likely to stumble in declining markets."
VPMCX, only 3 years old at the time, came in at #12.
Perhaps a good summary of attitudes at the time is this part of the text:

low in our experts' esteem were index funds -- the increasingly popular vehicles that aim to match the returns of a major market barometer such as the S&P 500. Ralph Wanger, manager of the third-place Acorn Fund, was the one maverick in our survey, awarding a vote to Vanguard's $900 million no- load Index Trust, up 27.3% for the six months to July 1, compared with 27.4% for the S&P 500 that it attempts to duplicate. Says Wanger: ''At least you're assured of approximating the market averages with an index fund. The S& P 500 is one tough bogey."

CFG Bank out of Baltimore. 12 and 18 months available: $500 minimum. Must fund it by ACH. Must be able to upload DL. Deal-breaker for me. Rate: 5.08% and yield = 5.2%.
https://originate.cfg.bank/TeaOGDZRznczU20/getting-started/landing-page
https://www.cfg.bank/personal-banking/personal-deposit-rates/
EDIT: DL upload not essential. I tried it. The process did allow me to go forward, though I did not finish. Not ready.

Thanks everyone. Your inputs are most valuable since I am still new with precious metals. Since COVID I hold about 5-10% gold stock, IAU, just to reduce the portfolio volatility. Sold some when it reached over $2000 an ounce and bought more when it down at $1,800. If @sma3 is right, the fight over debt ceiling is coming. Hope both sides can resolve this. So far, it serves as a good diversifier to stocks and bonds with little correlation.

Friend bought one mill $$ pure gold bars last wk from Texas precious metals

Hope @johnN's friend has some place safe to store them.

@yogibearbull
Hi sir - two separate accts
Tsp: all tsp fund divided evenly- s i c and tsp L2040 L2045 L2050, 10% G fund
Sep Ira: @ Vanguard have Vang 2040 2050 and also Iwm vo voo etc other vehicles mentioned (tsla snow lcid Pltr etc)
Thank you for the clarification
Did not pay attention if LFunds in tsp are more conservative than target date fund in Vang or fidelity etc... Thank you for pointing it out

@LewisAbraham... Sir try a little cover call iron condors or csp
Definitely spite it up
Do tqqq Tna Tsla soxl soxs
Keep you at the chart bench from markwt open until end weekday if you have free time lol
1-3% of mine swing trades csp or cc (mostly csp)
Csp cc Delta 10 15 definitely worth a look

@Sven - Picking up on what Mike said, ETFs that invest in the physical metal are less risky (or, at least less volatile) than funds that invest in gold mining companies. So the metal itself experiences less volatility than a group of mining companies inside a fund might. But, longer term there’s more potential profit in the mining companies. I’ve seen anywhere from 3-8% recommended by various observers as the “right” portfolio exposure. And some won’t touch it with a 10-foot pole.
The Permanent Portfolio fund, PRPFX, keeps 25% in gold and silver bullion. And, honestly, I don’t know how they manage to do that and still keep the fund’s volatility as low as they do. That’s one option for those seeking modest exposure to the precious metals. And, a lot of natural resource funds also hold some - usually only in small proportion.
The biggest problem with gold is its utter unpredictability. 50%+ multi-year gains followed by 30% or greater multi-year declines are not unheard of.
2000 + 50% = 3,000
3,000 - 30% = 2,100
:)

I used to get two or three print papers and take hours to read every article. Reading on line is not the same, although if the website provides you with a "print edition " it is close.
Still I have to ask myself, if I go to the library and grab the Economist, why does it take me an hour to work through it, as opposed to 5 mins with the online version?
Online I look at headlines, no pics and move on.
While the NYT, new Yorker ( remember the three part articles!) and WaPO have all been dumbing down their content, online cannot approach a printed hard copy to capture your attention

Just to add to the above ….. Sold all remaining shares of PRWCX 7/5/22 @ $32.42

”If I own a volatile fund, I expect it to go down more than the market. But I also look for it to more than make up that underperformance on the upswing. And I'll wait that out, unless there are specific reasons for me to doubt the fund or the management going forward.”
We’ve discussed in the past that this approach works if one has socked away an amount of cash sufficient to outlast a multi-year bear market so they don’t need to pull money out of a deeply depressed equity portfolio. Folks have mentioned holding anywhere from 3 years worth all the way out to 5 or more years worth of cash. If I remember correctly, @msf is one who does that . Different strokes. I don’t hold a cash reserve (but do have a pension), so my inclination is more to limit big swings in investment portfolio. The “upside” would be that I’m 100% invested all the time.
BTW - The folks that hold a lot of reserve cash have done very well the last couple years. I never could have envisioned 2 or 3 years ago the kind of returns cash / cash-like investments have delivered the past couple years. To have anticipated that requires one with more intelligence and foresight than I possess. Wasn’t it only 2 years ago that Powell was describing inflation as “transient.”?

After the dot com bubble burst and my largest holding was down 10% more than the market (i.e. around the figures Lewis is using), I got a cold call from someone pitching professional portfolio management. I still remember my response: I already have professional managers, and I started naming the managers of that fund.
Some of us were not entranced by the ability to trade Fidelity Select funds seven times a day (hourly pricing) back then, and don't feel the need to trade ETFs tick by tick today. I make a change when I can no longer answer the questions: what do I expect from this fund and why is it part of my portfolio?
If I own a volatile fund, I expect it to go down more than the market. But I also look for it to more than make up that underperformance on the upswing. And I'll wait that out, unless there are specific reasons for me to doubt the fund or the management going forward.
Regarding VFORX, I generally agree that for many employees "one and done" is a great option. I would have loved to have had any sort of asset allocation option available when I started working and had no clue what I was doing.
If one is willing to pay double the expenses (0.11% ER vs VFORX's 0.06%), there's a fixed asset allocation fund that has done a little better. FFNOX correlates 100% with VFORX according to Portfolio Visualizer. I didn't believe that either, but that's what it says.
PV's performance analysis reports FFNOX having higher annualized returns, lower volatility, smaller max drawdown (based on monthly figures), better Sharpe ratio (to be expected given higher returns and lower volatility), even closer stock market correlation. Though its best year was inferior to VFORX's.
Of course all of these differences are rather small. This is simply an alternative for those who eschew Vanguard or don't like the idea of glidepaths.

If one is concerned about the bubble factor in traditional market-cap weighted S&P 500/Total Market Indexes, it is easy today to have a value factor overlay to the index. VVIAX has beaten 74% of its peers in the past 15 years, 86% in the past ten years. Its expense ratio: 0.05%. But if you want to avoid "value momentum" as odd as that sounds, you could just equal weight the index to avoid having too much for instance in the FAANG stocks in the S&P 500 or too much in financials and energy in a market-cap weighted value index. RSP comes to mind, 0.20% expense ratio--still indexed in my view. In other words, active managers have some explaining to do.

@Baseball_Fan I don’t really agree, but a lot depends on how you define the term indexing. If one thinks of tracking the S&P 500 as the only kind of indexing, you could draw a bubble conclusion. To me, an index is a passive rules-based machine that a basic computer program can track or execute as a strategy at a minimal cost. It is not at all like the nation of Japan or even the Nikkei Index in isolation.
And yes one can quibble about the definition of active and passive as the S&P 500 actually has a committee of people selecting which stocks to include in it. But it’s worth noting that most employees in 401ks dollar cost averaging with their weekly paychecks into an indexed target date fund are not buying or just buying the S&P 500 in a bubble. They’re also buying foreign stocks and bonds in indexed form as well as small caps via a total market index. Moreover, because they’re buying at regular intervals every paycheck they are not merely buying a bubble, but buying both when the market rises and falls, at its peaks and troughs. So the end result smooths out their cost basis.
Sure there is a momentum tilt to market cap weighted indexes, but most active managers are afraid of deviating too much from the index and underperforming it dramatically when the market is rising. So they go down with the ship when the market falls. And their still much too high fees continue to kill their performance year after year. A handful of managers truly think differently, have low fees and the skills to be right when they think differently.

@johnN: "Tsp Ira all in 2045 spy Iwm and vo..."
Unclear.
TSP isn't an IRA and it doesn't offer one. If TSP, did you signup for new brokerage window? Heard bad things about it - too expensive, etc. There is indeed TDF L2045; a unique aspect is that fixed-income portion included SV TSP G Fund and TSP TDFs are much more conservative that typical TDFs.

What I find interesting regarding index funds is what Fleckenstein refers to the endless money train into said index funds (my paraphrasing, not his words) from retirement investors into 401Ks etc., just like what folks were thinking in Japan years ago...this is going to go on and on, until one day it doesn't and whammo. Drives stocks/indexes up no matter what the true fundamentals are (note what AAPL did last quarter, earnings I think were flat or so and market cap goes up what $5-6Billion? What's up with that?
I think that his one of the reason's some/many invest with funds that are NOT index funds...thinking is that index fund results are based on group psychology to an extent and "it works until it doesn't"...
Hmm.

Our current list keep adding buy list
BRK.b
Tsla
Vang2040 2050
Iwm
Yinn fxi
Vong
Vo
Vang international etf and eem
Vht
Qqq vgt
Tlt
Boeing
Cost
Little XLE slv gld
Tsp Ira all in 2045 spy Iwm and vo international small caps
Also few hundreds per month into btcusd ethusd dodecoins (100 200)
Prob more heavily load toward fxi China sp500 etf imho ccp new world leader in 3 5 yrs bypass everyone else
Thankyou so much for all the wonderful commentaries and thoughtful suggestions

This thread to me is really fascinating and partly understandable:
https://twitter.com/paulkrugman/status/1647197271304335360

Hold a target date fund for 20, 30, 40 years? Sounds good in theory.
What legal or contractual agreement exists with the sponsor to operate that fund for an indefinite time period or as @Baseball_Fan says to adhere to the same allocations, operating restrictions, fee structures? I’ve had at least two firms I invested through (Strong & Oppenheimer) go completely out of existence in the past 25 years. A third one, Templeton has been essentially merged out of existence since I opened a workplace plan there in the early 70s. Or are these simply extreme aberrations due to my antiquity?

”From 12/31/2021 through 10/12/22, PRWCX lost 16.91%. Since then it has gained 13.54%.”
At the depth of the decline, $100 invested on 12/31/21 would have fallen to just over $83 - perhaps enough to spook some little old “grannies” (but no one here) into selling. Those who continued to hang on would have $94.34 remaining today for every $100 invested at the end of 2021.
Those with the foresight to pour additional money into the fund on 10/12/22 would have reaped significant reward. However, at that point there were more compelling opportunities in “growthier” funds that had fallen farther as well as in individual securities - were one willing to gamble a bit.