It's Awards Season. We just watched the Oscars and recently watched the Grammys. The Financial Services Industry also has its own awards – the Morningstar Fund Manager of the Year Awards. Mark and Tom discuss these awards and review how these managers performed subsequent to winning the award. They focus on the Yacktman Fund, presenting the chart that shows Yacktman's Alpha relative to the Russell 1000 Value benchmark.
See the Yacktman Fund's Alpha Relative to the Russell 1000 Value Index at ifa.com - Stock picking - Step 3
The classic Active vs Passive debate between Rex Sinquefield and Donald Yacktman at the Schwab Institutional conference in San Francisco, October 12, 1995 can be found here.
Don Yacktman, founder and co-manager of the Yacktman Fund tells Consuelo Mack how he continues to beat the overall stock market, landing in the top one percent of all large cap mutual funds over the past one, three, five and ten-year periods. This performance was recently recognized by Morningstar, the mutual fund rating firm, that nominated Yacktman for Domestic Manager of 2011. See the interview here.
The formula to calculate the number of years needed to determine if an alpha is statistically significant can be found here.
Also read Brad Steiman's two articles on statistical significance: "What's the Significance?" and "Paradox of Skill."