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[quote=Anonymous][quote=OTAlexFA]The market environment suggests it is currently a stock picker's market.  So, active management for that hypothetical client is where I would lean.[/quote]
This is 12:57, 14:05 and 14:33 again.

Why specifically does this environment suggest it's a "stock picker's market"?

I find that during big bull periods when almost everything goes up, people make this assumption that there was not a lot of variance within different segments of the market, or between individual stocks, when this isn't actually true.  It's just that because everything went up, people don't notice the variances as much, as 30% versus 50% between two stocks doesn't trigger any emotional reaction.

By contrast, when a market is likely to churn sideways, these same variances will actually involve red versus green on a screen (i.e., you now see a -10% versus 10% between these same two stocks), so it's more noticeable to people.  Hence, all the active managers pipe in with the "stock picker's market" cliche, as if every market isn't a stock picker's market.

Put another way, what statistical or empirical evidence can you point to that "alpha" can be generated in a market like this more than in a different environment? [/quote]

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