Great article!

In your experience, at which part of the IITWD chain do most people fail? Considering my own experience, it feels like it's somewhere during the thought and/or word stage - that is, being able to effectively translate right-brained insights into left-brainese to communicate to others. My sense is that my right brain stalls, at which point my left takes over and says, "I need more information!" (And this last part feels like it ties in with the previous article on relative vs. absolute decision-making.)

(Interesting findings re: your thesis. Haven't looked at hard data but suspect that active managers really earn their wages, in theory, by mitigating downside risk and not whether they squeak out an extra hundred basis points. Unfortunately, compensation structures are overwhelmingly geared towards returns ("beating the benchmark"), and eventually, increased risk-taking and chasing yield/returns come home to roost. Something tells me it's this inability to protect the downside that is the pro-passive camp's biggest bone to pick with active management. Just my opinion, of course.)