Part V



AS I RE-READ MY thesis “The Economic Role of the Investment Company,” from cover to cover, three things struck me. First, it wasn't too bad! While the quality of the writing was hardly first-rate, it seemed quite serviceable and comprehensible, especially considering that I was a not-particularly-mature young man but 21 years of age, and that it was my first major writing project. The organization seemed about right too, and the research—in a field where data were scarce—remarkably complete.* I'm not sure that I would place the thesis in the high honors category, but I surely reveled in that outcome all those years ago.

In retrospect, I wish that I had done more research on the extent of the mutual fund industry's success in serving investors, and, in particular, that I had evaluated fund investment performance more comprehensively. First, I accepted at face value the industry's claim that, as cited in my thesis, “the attainment of objectives is proof of good management,” and ignored the perhaps inevitable vagueness of most funds’ goals. (It's difficult to refute a claim, as made by one fund that I cited in the thesis, of having provided “reasonable dividends, profits without undue speculation, and conservation of capital,” worthy as those objectives are.) But the kind of comparative data we take for granted today were then almost three decades away. ...

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