Active management is hard.

Take 2,862 mutual funds. Choose one quarter of them randomly (double coin flip, say) and call them winners. Then do that again, and see how many funds are two-time winners. Then do it three more times. Now you will have a group of five-time winners, who made it through five unbiased random selections. How big is that group? It's 2,862 x (0.25)^5, or 2.8, call it 2 or 3 funds. Anyway S&P Dow Jones did this experiment except that instead of choosing funds randomly they actually looked at which of those funds had top-quartile performances in each of the five years ending March 2014. And the answer was 2. So! Elsewhere here is an implausible statement:

A recent survey by Scottrade tracked the trading habits of different generations. It found millennials or Generation Y, on average, derived nearly a third of their annual household income from trading. Meanwhile, Generation X and baby boomers generated far less -- about 20 percent of their incomes from the markets.

And here is a suggestion for raising financially savvy children: "To spark interest in the stock market (and investing more broadly), you might start by gifting a few shares of a company whose products resonate with your child, like Twitter or Nike." Okay. If you want to raise financially savvy children, probably start by teaching them about coin flips.

Everyone kind of suspected Barclays' dark pool.

Here is a story about how Barclays customers worried about the execution quality they got in Barclays LX dark pool months before Eric Schneiderman sued Barclays for fraud. Also:

Barclays is expected to respond to the attorney general's civil complaint this week. The firm plans to mount a strong defense against the allegations, said people familiar with the bank's thinking. It is expected to argue that certain emails and other documents cited in New York's complaint were taken out of context, the people said.

You never want to lead with "the e-mails were taken out of context." Like, oh, we're mounting a strong defense by saying that our terrible emails aren't as bad as you'd think by just reading them. The market has a different reaction, with Barclays LX volume down 66 percent in the week after Schneiderman's lawsuit. But the Financial Times couldn't get any big asset managers to complain on the record about dark pools; says one consultant:

Asset managers moved to dark pools to avoid high-frequency traders, only to find they are infected by high-frequency traders. Fund managers don’t like to talk about it because that would make them appear naive

I guess Schneiderman's lawsuit didn't help with that.

Alibaba has a lot of powerful owners.

In 2012 it raised $7.6 billion in financing from Boyu Capital, Citic Capital and the China Development Bank private investment arm. And those firms had powerful friends:

Their senior executive ranks included sons or grandsons of the most powerful members of the ruling Communist Party, according to an analysis by The New York Times. Documents reviewed by The Times also show that a fourth investor bought Alibaba shares that month: New Horizon Capital, a private equity firm co-founded by the son of China’s prime minister at the time, Wen Jiabao.

It's a little funny that JPMorgan is in trouble for supposedly giving some sons and grandsons jobs in order to win China capital markets business. Just doing Alibaba's initial public offering will enrich a lot of Communist Party scions; why should further enriching them to win the business be a crime? Elsewhere, Breakingviews has some doubts about Jack Ma, and some worries about a Chinese government backlash against Alibaba, though I guess that seems sort of unlikely if it's owned so much by government officials?

The ferrets weren't fake.

The Securities and Exchange Commission is having a grand old time busting penny-stock scams. Here's one about CytoGenix, an allegedly fake vaccine development company that allegedly developed a fake vaccine for bird flu. Then:

The September 17 press release, titled "CytoGenix, Inc. Initiates Ferret Testing Expecting Positive Results for Avian Flu Vaccine Study," contained similar outlandish claims, only this time touting the results of"testing CytoGenix's novel liner DNA technology on ferrets, with the expectations of a positive result, furthering the development of the vaccine candidate."

You might think this was based on fake ferret tests but actually no?

The ferret study touted in the September 17, 2010, press release was also two years old, and, as the release's references to its "expected results" suggest, CytoGenix did not even know the actual results of the two-year old study, because it had failed to pay the researchers for their work.

So it just did some pointless free ferret experiments? Poor ferrets. Anyway there's the usual claims of pumping (with press releases) and dumping (of stock), but also this:

Cowsert obtained approximately $91,000 in funds directly from CytoGenix investors by falsely telling them that they were investing in a private placement of CytoGenix stock, but no shares were ever issued to the investors. Cowsert asked the investors to make their checks payable to him personally, deposited the checks into his personal bank account, and used the funds to pay personal expenses.

Come on! When you're investing in a company, don't make your checks payable to the chief executive personally. Didn't your parents teach you how to invest in stocks?

The Senate's Renaissance tax hearings are tomorrow.

In which Renaissance executives will I guess say that their tax-dodging fake options are real options and not tax-related. Or, alternatively: They will shrug and say "the IRS is okay with this; if you want to change the law, go ahead." I am so excited, aren't you?

Things happen.

A new subprime bubble for used cars. Chris Flowers is not happy with banking regulation. Russian billionaires are worried. Yo is worth 1/60th of a Cynk. "Before buying Vega Sicilia, he had been a janitorial services mogul; afterward, he was a man of culture." "A supplier to McDonald’s and KFC in China has been accused of supplying rotting meat to the fast-food chains and falsifying product expiration dates," super.

To contact the writer of this article: Matt Levine at mlevine51@bloomberg.net.

To contact the editor responsible for this article: Tobin Harshaw at tharshaw@bloomberg.net.