Thanks for sharing your views Andrew. Clearly, this is a matter that each investor must decide for him- or herself.

I agree that it’s impossible to prove that any fund- (or stock-) picking strategy is truly superior to investing in index funds, rather than that one was simply lucky.

However, while getting lucky for one year would be unsurprising, getting lucky with the same strategy for 15 or 20 years is far less likely.

I’d be the last to claim that investing is a science, but you can borrow the scientific method at least in this regard — come up with a plausible system that you hypothesize will outperform the overall market, implement it, and see whether or not your hypothesis matches measured reality over a reasonably long period.

Since I’ve been using the same system successfully for nearly 2 decades, I think it’s fair to say that it is at least more likely (though not proven by any means) that the system works rather than that I’m simply incredibly lucky.

Prefacing my next point, I’ll say that in no way do I compare my investing acumen, such as it is, to that of Warren Buffet. While he’s possibly the greatest master of investing of all time, I’m at best a reasonably adept amateur. Rather, I use WB as an extreme example.

If you take to its logical conclusion your point about 15 years of out-performance being insufficient to prove that an active fund has figured out how to consistently beat the market, or that a fund-picking system works, you could say the same about Warren Buffet.

You could argue that even 70 years of beating the market doesn’t prove that WB figured out how to pick market-beating investments. He could simply be the luckiest investor in the history of humanity. However, that’s far less likely.

Having said all that, I come back to my initial comment — you, like every other investor, have to choose your investing approach for yourself. After all, you’re the one who will have to live with the result, good, bad, or average.