Josh Saves the Mutual Fund Industry

My pal, Josh Brown has six ideas on how to save the mutual fund industry. If the industry were smart (if!), they’d implement these immediately. I’ll summarize them.

Idea One: Don’t play no game that you can’t win. There should be an industry-wide moratorium on new large cap US stock funds.

Idea Two: Exclusivity sells. Everyone wants what they can’t have.

Idea Three: Ask more of your investors. Behavior is the single biggest determinant of investor success – not manager tenure or how many analysts you have or how many Morningstar stars you accumulate.

Idea Four: Benchmarks are bullsh*t. Benchmarks are not handed down from God on Mount Sinai and they do not appear in nature.

Idea Five: (Read if for yourself).

Idea Six: Shrink! There’s been some consolidation among the big asset management firms and fund families. There should be more. Bill Miller said that 70% of all managers are essentially benchmark-huggers.

Read the whole thing.