Lots for us to discuss over a drink sometime Jason (maybe in Philly?) but this bit got my attention:
But for the last 20 years, multiple studies have shown that many active equity managers are superior stock pickers and do indeed earn excess returns on these holdings. Russ Wermers demonstrated that the average stock held by active equity mutual funds earns a 1.3% alpha,
The question will be though are there enough of those managers to outweigh the poor ones and, as has been shown by numerous studies of some very professional manager selectors, picking them in nigh on impossible. The Russ Wermers reference is interesting in that I presume it is the same Russ Wermers who in 2008 in another paper showed it was difficult to distinguish between luck and skill in active management? ;-)