Down to luck: why today’s hedge funds can’t rely on just skill

Have hedge funds got so good at investing that luck now dominates the field?

baseball-pitcher

A long time ago, a college professor explained just how hard it is to discern skill from luck with an example I'll never forget. Imagine you get a letter saying AT&T will go up next week and it does. The week after, you get another letter saying Microsoft will drop, and sure enough, that's what happens. After receiving five such letters from an anonymous stock picker, would you consider investing with that person? How many times does the person have to get specific stock movements right to

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

Most read articles loading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here