5 ms·

I wonder if this is any different than Money magazine ranking mutual funds? Nobody smart would ever use that ranking to pick a fund. "Revert to the norm" anyone

• loumf 13y ago
  I guess it depends on whether we think the underlying ability is a skill with long-term, differentiated levels. If so, even after factoring out reversion, we could still find that there is a consistent ranking. For managed mutual funds, I think it's been studied that there is no ability (source: Boglehead books). So, unless things radically change, there is no signal in the noise to be found -- the rankings aren't more stable than random. I have no idea for VC funds.