I've liked Francis Chou's thought process for 2 decades. Just finished reading the 2023 annual letter. I don't understand how bright money managers can keep making justifications for pursuing their philosophy whilst underperforming vs S&P over long period of times:
An individual invested in this fund (& many others) for 10yrs, 15yrs, or 20 yrs has significantly underperformed the S&P 500. Yet the same letter states how the Chou Fund is rated as having one of the best returns over long period of times.
If the reason to invest is the desire to outperform the index - chase alpha - how do managers justify their performance? Do money managers believer the index is too risky because of tech stocks and while active money managers may underperform, they are less risky than the index???
After pursuing an active management value investing style for two decades, I realize that compounding in index would have yielded better financial returns. However, by participating in the community, I have learned a lot.