09. Money — The Stock Picker and the Wire Transfer

Overrated · Active stock-picking

The active-management fund industry markets skilled fund managers as able to reliably beat the market through stock selection. S&P Dow Jones Indices tracks this claim yearly in its U.S. Persistence Scorecard. The Year-End 2025 scorecard found 79% of active large-cap U.S. equity funds underperformed the S&P 500 in 2025. That is worse than 2024's 65% rate, and the fourth-worst year for active large-cap managers in SPIVA's 25-year history. The same report found 71–79% of MENA equity funds underperformed their benchmark in 2025, and over 80% over ten years. More than 70% of global-equity funds in Korea, Thailand, and Malaysia underperformed in 2025 too.

Underrated · Remittances

Mainstream development-finance reporting treats foreign direct investment and foreign aid as the serious external finance for developing countries. Money sent home by migrant workers is framed as a private, minor sideline. The World Bank and KNOMAD's Migration and Development Brief 40 measured remittance flows to low- and middle-income countries for 2023. Remittances to those countries reached an estimated $656 billion in 2023, surpassing FDI and official development assistance combined. The top recipients were India, Mexico, China, the Philippines, and Pakistan. Sending $200 cost 6.4% on average in the fourth quarter of 2023, above the 3% SDG target.

The gap

A fund manager's picks are advertised in prospectuses and quarterly letters; a migrant's wire transfer is advertised by no one. FDI and aid are negotiated in public between governments and institutions; remittances move in small private amounts that never make a headline. Both patterns hold outside the United States too — active-fund underperformance repeats in MENA, Korea, Thailand, and Malaysia, and remittances outweigh FDI and aid across the low- and middle-income world, not just in one country.

Example: A fund's marketing brochure earns a magazine spread, while the sum of every migrant worker's transfer receipt, added together, outweighs the world's foreign investment and aid budgets combined.

Verdict. Active stock-picking is a story that outperforms its own record; remittances are a record that outperforms their story.

Overturned if: a future SPIVA scorecard shows a majority of active large-cap managers beating the S&P 500 in a given year, or a future World Bank brief finds remittances to low- and middle-income countries falling back below combined FDI and ODA.

Sources. 2025 · S&P Dow Jones Indices, "U.S. Persistence Scorecard Year-End 2025" — S&P DJI SPIVA · 2024 · World Bank, "Remittances Slowed in 2023, Expected to Grow Faster in 2024" (Migration and Development Brief 40) — World Bank