That would be the reversion to the mean[1]. This is a term I really dislike because it makes it sounds as if there is some sort of equalizing force making over-

That would be the reversion to the mean[1]. This is a term I really dislike because it makes it sounds as if there is some sort of equalizing force making over-performers under-perform later. This is more the following: if you overestimates the expectation of a random process, you are going to be disappointed. In our case, this does not makes the "hot streak" any less probable when you start looking, for a specific edge fund. It is true it would be interesting to select a group of over-perfomer and study their future return to know if past performances are a good predictor of future performance. I feel you would probably get mixed results! Although as I said in the sibling comment, you are probably right, and no amount of statistics could explain performances seen in this particular edge fund. [1]https://en.wikipedia.org/wiki/Regression_toward_the_mean https://en.wikipedia.org/wiki/Regression_toward_the_mean