How do some actively-managed mutual funds outperform the market

>>1059424
>if the markets are truly efficient

Who the fuck told you this? I'm about as free-market as anyone could reasonably get without being an anarchist, and even I recognize that the markets aren't efficient in the "perfect knowledge" sense.

Financial markets trade on expectations m80, not fundamentals. The fundamentals bleed through every once in a while when the financial markets do a Paul Walker impression and hit the wall.

>>1059424
>actively-managed mutual funds outperform the market
where is the proofs

>>1059432
"some"
Just look up top performing actively-managed mutual funds.

>>1059424
they don't

>>1059424
Markets aren't efficient.

Stocks go up and down based upon human emotion largely. If the fed sounded positively about a certain sector, stocks would shoot up in that sector and vice versa.

Naturally there will be lucky funds, especially as more and more funds are being created the chances of a successful one increase.

There are a lot of stupid people who don't understand what an "efficient market" means. Efficiency here does mean someone beating an an external entity. The people ARE the market. An efficient market means that at any given point in time there is someone exploiting another person. Every sell is balanced by a buy so that means someone is gaining money or losing money. If there was no belief in making money there would be no market. It is the combined smart and dumb actions of millions of people that creates the efficiency.

Markets are efficient in the long run. People that profit from market inefficiencies play an important role in ensuring that they are efficient in the long run.

>>1059429
>even I recognize that the markets aren't efficient in the "perfect knowledge" sense.

The implication here is that people systematically make mistakes. Do you think that is true?

>>1059424
>if the markets are truly efficient
Meaningless assumption.

Let's do some math. The average performance of all companies is the "market". Therefore, half will perform above average and half will perform below average. Therefore, you assuming that you are either performing better or worse than the market, you will have about a 50% chance at each.

Pro tip: the S&P 500 is not "the market", for it is the top 500 companies.

>>1059631
You can have 90% of a set above or under the average/mean. You are confusing with median.

>>1059424
>In financial economics, the efficient-market hypothesis (EMH) states that asset prices fully reflect all available information. A direct implication is that it is impossible to "beat the market" consistently on a risk-adjusted basis since market prices should only react to new information or changes in discount rates (the latter may be predictable or unpredictable).

Well, if you accept the EMH, I'd imagine there would be two ways

1) They aren't CONSISTENTLY outperforming the market

2) They have access to information the market doesn't