PT  - JOURNAL ARTICLE
AU  - Susan Belden
AU  - M. Barton Waring
TI  - Compared to What? A Debate on Picking Benchmarks
AID  - 10.3905/joi.2001.319488
DP  - 2001 Nov 30
TA  - The Journal of Investing
PG  - 66--72
VI  - 10
IP  - 4
4099  - https://pm-research.com/content/10/4/66.short
4100  - https://pm-research.com/content/10/4/66.full
AB  - To evaluate the success or failure of active funds, we need to select benchmarks. Susan Belden of Skidmore College and M. Barton Waring of BGI hold a debate in writing over whether a benchmark should be based on a broadly accepted market benchmark, such as the S&P 500, or a narrowly defined benchmark, based on the investing style of the fund. He finds that the analyst is able to explain over 90% of price movements not traceable to publicly available information, which is consistent with a high degree of market knowledge. A significant proportion of these price changes are attributable to factors unrelated to information per se, providing support for the hypothesis that a significant proportion of company price changes are triggered by events relating to fads, fashion, or sentiment.