WHY IS IT VIRTUALLY IMPOSSIBLE TO PICK THE WINNER,YET SO EASY TO PICK A WINNER?AND WHAT SHOULD YOU DO ABOUT IT IN THE 1990S?
Journal of Portfolio ManagementWinter 1992
INVESTMENT MANAGEMENT is a field fraught with fragility and fallibility, a field in which today's careful, rational fund selections are too often tomorrow's embarrassments. There is little doubt in my mind that few portfolio managers actually believe that there are easy means to providing performance superiority, and that few financial advisers or intelligent investors believe that such superiority can be consistently recognized in advance.
This article considers what I believe to be a peculiar paradox of investing: how difficult it is to pick “the winner.” I would like to present the logic of my observations in the following manner: