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The Active Management Paradox: Why Skill Improvements Haven't Translated to Better Returns

"No army can withstand the strength of an idea whose time has come. " — Victor HugoThe Debate ContinuesMy July 23, 2025 Morningstar article, "If Active Investing Is the Loser's Game, What's the Winner's Game. " examining active versus passive investing sparked a passionate response from Jeff Joseph, "Active vs.

" examining active versus passive investing sparked a passionate response from Jeff Joseph, "Active vs. Passive Investing and Anti-Intellectualism," who attempted to poke holes in the case for passive investing. His critique provides an excellent opportunity to examine the mathematical realities and empirical evidence that define modern portfolio management.

His critique provides an excellent opportunity to examine the mathematical realities and empirical evidence that define modern portfolio management. The Mathematics Matter More Than the MarketingJoseph argues that "exactly 50% of all investors must outperform any given average" — but this reveals a fundamental misunderstanding of how markets actually work.

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