Determining if a manager produced high returns thanks to their expertise or because of luck is a key piece of information for investors who are selecting which firm to give…
Tag: Luck vs. Skill
Five Questions: Tackling Some of the Toughest Questions in Investing with Michael Mauboussin
By Jack Forehand, CFA (@practicalquant) There are many skills that can benefit you as an investor. Being smart is certainly an asset, although it can also get you in trouble…
On Telling Luck from Judgement
A recent article in the Financial Times cites the example of Neil Woodford, once a darling of the investment community, whose recent years of underperformance represents a cautionary tale regarding…
Don't Confuse Luck and Smart Investing
A recent article by Bloomberg columnist Barry Ritholtz warns investors that although huge wins get more attention than smaller, “routine” wins and losses, those windfalls don’t necessarily represent smart investment…
Hulbert: Fund Performance is Largely Luck-Driven
In a recent Wall Street Journal article, Mark Hulbert makes the case that even over periods as long as ten years, investors stand a good chance of underperforming their benchmark,…
Housel on the Irony of Luck
In a recent article for the Collaborative Fund, Morgan Housel contrasts luck and risk as they relate to investing, arguing “you cannot understand one without appreciating the other.” “This is…
Luck or Skill? Focus on the Process, not Performance.
By John Reese (@guruinvestor) — Is it better to be lucky or smart? When it comes to investing, I think we can all agree that success arises from a combination…
Housel Says Investing is Also an Art Form
A provocative article penned by Collaborate Fund’s Morgan Housel describes how investing, like many fields, embodies both art and science. “Investing,” he writes, “is maybe 60% science, the rest art.”…
Greenblatt Weighs in on Active Management
“Most people have a tough time sticking with active managers who underperform for a period of time. But of course, if you’re going to beat the market, you have to…
Evaluating Portfolio Managers: The Luck Factor
We are constantly singing the praises of examining fundamentals when choosing stocks, but a similar process applies when evaluating the performance of portfolio managers, says Jacques Lussier, CFA and CEO…