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> It turns out that the average professional portfolio manager is just not very good at picking stocks FTFY. Time and time again we’ve seen evidence that portf
by voisin 3y ago
> It turns out that the average professional portfolio manager is just not very good at picking stocks
FTFY. Time and time again we’ve seen evidence that portfolio manager success in a give year is largely random and does not persist. Very few (the superinvestors of Graham-and-Doddsville as a classic example) are capable of persistent alpha.
- bombcar 3y agoIf I remember correctly professionals could beat the market - before costs. Which is the problem; costs can’t be avoided.
- samatman 3y agoIt should be true of the average (median) investor as well. This is nearly tautological in fact.
- voisin 3y agoThe point isn’t that the average investor in a given year will perform at the market average (this is what I think you are referring to by the tautological claim). The point is that over time the correlation between winners (retail or professional) one time period to the next is essentially zero.
- samatman 3y agoMy main point was that the quote you were "fixing": > It turns out that the average person is just not very good at picking stocks Is accurate, and not in need of correction. As a sibling comment pointed out, the average for professionals is higher: by almost exactly what they cost, as it turns out. For various ergodic reasons, that means that an investor without personal alpha should stick with index funds.