Money For the Rest of Us · Wednesday, October 28, 2026
Host David explicated that active managers are performing worse than ever historically, pointing out that from 2010 to 2024 the average stock fund underperformed by nearly 2% relative to the S&P 500. He attributed this decline to the paradox of skill described by Michael Mobison and the growing prevalence of index funds.
“Active managers are getting worse. Their level of ability, well, their level of outperformance is as bad as it's ever been.”
“Mobuson calls this the paradox of skill. As you get more skill, outcomes depend more on luck because you can't get any type of edge.”