Short on the Next Bounce

We would advise a short on TROW and BEN (Franklin Resources) on the next rally, as these are two asset managers that have not yet collapsed.

We believe the long-term trend is away from mutual funds, as they have proven to not be able to preserve capital in this down market. Many are in fact under performing the indexes which are heavy with financials or commodity related (energy, materials, industrials) exposure.

We believe that the long-term trend is CLEARLY away from active management - save the very best and the value added in small cap selection, towards passive indexing. There has been a proliferation of etf indexes.

As we have often stated, the fund managers are paid on fees, not by having the bulk of their own net worth in their funds. Lets call them out for what they are!