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CBS MoneyWatch is making a big deal about its so-called blog wars, the latest of which pits two investment experts on whether you should invest with active mutual fund managers or buy index funds that deliver market returns.

However, it's hard to call something a war when the two experts - Legg Mason Inc.'s Robert Hagstrom and consultant and author Charles Ellis - are so warmly disposed to one another. And perhaps more important, it is an awfully one-sided conflict.

I say this because Mr. Hagstrom, who takes the pro-active management side, is completely unconvincing in his argument that the broader stock market can be beaten consistently by professional money managers. His argument rests mostly on the observation that active managers see their returns suffer because they trade stocks far too frequently.

He notes that the 500 largest U.S. stocks drifted sideways between 1975 and 1982 - but within this listless trend, stocks were doubling all the time. Over a one-year holding period, an average of 3 per cent of stocks doubled in price. Over a three-year holding period, 18 per cent of stocks doubled. And over a five-year holding period, 38 per cent of stocks doubled.

"That almost four in 10 stocks went up at least 100 per cent over five-year rolling periods when the broader market barely budged suggests to me the market mispriced these stocks," he said.

Hold your stocks for the longer term, and these gains - and stock market outperformance - can be yours. That's Warren Buffett's approach, and Bill Miller's.

Mr. Hagstrom's argument would be a lot stronger, though, if he could back it up with his own outperformance. Unfortunately, his Legg Mason Growth Trust fund has been a dud, suggesting that the theory behind active management doesn't mean a whole lot in the real world.

Over the past 12 months, to March 31, the fund has returned 55.6 per cent, beating the 49.8 per cent return of the benchmark S&P 500. But that's short term performance. The fund has lagged the S&P 500 by 8.6 percentage points over three years, 6.9 percentage points over five years and 1.2 percentage points over 10 years.

For Mr. Hagstrom, beating the stock market is a tough feat. And he's not alone.

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