7The Abject Failure of Professional Advisors and Managers


If Hayek’s arguments have not convinced you that money managers cannot deduce true prices that are better than the prices set by the dispersed knowledge of the multitudes, the empirical record of active investment management’s dismal failure should convince you.

I will now review that record. I’ll do it first in a simple way, then more extensively with a review of the research studies.

The Unpredictability of Market-Beating Performance

The statistical record of performance of professional investment managers and advisors is voluminous and thoroughly well documented. It has been analyzed ...

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