IntermediateMAD Academy0:46Portfolio

The Yardstick Decides the Verdict

Beating a benchmark means nothing unless the benchmark represents what you could have held instead.

0:46 · 6 scenes

This lesson is part of a MAD Academy plan.

What the Lesson Covers

  1. 0:00Beating a benchmark is easy if you get to choose the benchmark.
  2. 0:05What makes one valid. It has to be investable, specified in advance, and genuinely an alternative.
  3. 0:14The mismatch trick. Comparing a concentrated equity portfolio to a bond index proves nothing at all.
  4. 0:24Risk-adjusted comparison. Beating an index while taking twice the risk is not outperformance.
  5. 0:33The one to use on yourself. The index fund you could have bought instead, with no effort at all.
  6. 0:41Pick the benchmark first, then measure.
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Educational content only. MadStockAlerts provides market commentary, research, and educational content. It is not personalized investment advice, and nothing here is a recommendation to buy or sell any security. Trading and investing involve substantial risk, including loss of capital. See the Risk Disclosure and Customer Agreement.
Educational content only. MadStockAlerts provides market commentary, research, and educational content. It is not personalized investment advice, and nothing here is a recommendation to buy or sell any security. Trading and investing involve substantial risk, including loss of capital. See the Risk Disclosure and Customer Agreement.
The Yardstick Decides the Verdict — MAD Academy Training Video · MadStockAlerts