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Able Quote by Michael Jensen

“Very little evidence was found that any individual fund was able to do significantly better than that which we expected from mere random chance.” quote by Michael Jensen
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“Very little evidence was found that any individual fund was able to do significantly better than that which we expected from mere random chance.”

Michael Jensen

About This Quote

Source Paper: Portfolio Theory and Performance Evaluation, 1993

Individual funds rarely outperform random chance, indicating limited skill advantage.

In simple terms: Funds seldom beat randomness.

Key Takeaway

Diversify and manage expectations.

Themes

investment randomness performance

Mood

analytical skeptical

Type

academic practical

When to use this quote

  • retirement planning
  • asset allocation
  • risk management

Key Concepts

finance statistics

Questions to Reflect On

  • How do you assess fund manager skill?
  • What role does luck play in investment returns?
A Different Perspective

Statistical noise can mask true skill.

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