PHILADELPHIA REFLECTIONS
Musings of a Philadelphia Physician who has served the community for six decades

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Investing, Philadelphia Style
Land ownership once was the only practical form of savings, until banking matured in the mid-19th century. Philadelphia took an early lead in what is now called investment and still defines a certain style of it.

The Minnesota Investment Standard

{Wall Street}
Wall Street

The performance of mutual investment funds is commonly compared with the stock market as a whole, or some surrogate index of it. The uncomfortable thing is that successful funds grow, and when they get big enough, they just have to resemble the market as a whole. Subtract some fees and expenses, and they are the market. If there is no substantial difference between a managed fund and an unmanaged one, job security for investment managers comes into serious question. You would expect to hear a lot of gallows humor about a situation like that, but in fact it is largely treated as too painful to mention. Except perhaps, by Quakers.

One highly successful veteran of multiple famous Wall Street boar dooms is not a Quaker, but having spent twelve years in Quaker schools, certainly talks like one. His brand of humor has brought many weighty meetings to a halt, and in this case he has developed what he calls "The Minnesota Investment Standard." The allusion is to the little town that Garrison Keillor made famous, where all of the women are beautiful, and all the children are above average.

"In this remarkable case, however, all the mutual funds seem to perform below average."

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