The funds management industry has spawned a lot of gurus, be they portfolio managers, analysts or economists. This research paper looks at how good market experts and forecasters are. It’s not an easy question to answer. As Bill Sharpe suggested a long time ago, we need about 40 years of data on the performance of an individual before we can make a meaningful assessment as to whether they have any special investment talent. Based on this Sharpe criteria, even Warren Buffett would just scrape into the guru category.
The authors of this research paper look at the p...