The first episode of The Albatross is here.
In 1924, the first mutual fund, called Massachusetts Investors Trust, launched with $50,000 under management.
25 years later, former magazine writer A. W. Jones created the first hedge fund, which was, incidentally, a long/short fund. Keep that in mind for another time.
In the late 1960s, Michael Jensen looked at mutual fund performance and found it wasn't that great relative to a naive index.
Those 50 years of investing in the United States were about active management, stock picking.
In the 1970s, that changed, and the investing world split.
One camp systematized active management, turning stock picking into engineering.
The other camp stopped picking entirely and just bought the whole market after Jack Bogle and others introduced the index fund.
Another 50 years have passed, and the best ideas from active management and passive management are fusing.
This is driven in part by rapturous equity growth.
And whenever that happens, a lot of people end up with most of their wealth in one or two stocks.
And they start thinking very hard about tax.
My guest has had a front-row seat to all of this for the past three decades.
Paul Bouchey is the Editor of The Journal of Wealth Management, Managing Director of Applied Research at Morgan Stanley, and previously the Chief Investment Officer of Parametric Portfolio Associates.
Check it out.
And... the original music.
Have a great weekend.