The best argument for mutual funds is that they offer safety and diversification. But they don't necessarily offer safety and diversification.

Mutual funds have historically offered safety and diversification. And they spare you the responsibility of picking individual stocks.

There were two qualities about the mutual funds of the 1920s that made them extremely speculative. One was that they were heavily leveraged. Two, mutual funds were allowed to invest in other mutual funds.

Mutual funds give people the sense that they're investing with the big boys and that they're really not at a disadvantage entering the stock market.

I don't think that a mutual fund that invests exclusively in biotech start-ups or invests exclusively in companies in Thailand offers any great safety or diversification.

What I find very interesting about the mutual funds managers is that here are people who are the new masters of the universe. They're managing billions, yet they're subject to this quiet daily tyranny of numbers.