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.”
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.
Diversify and manage expectations.
Themes
Mood
Type
When to use this quote
- retirement planning
- asset allocation
- risk management
Key Concepts
Questions to Reflect On
- How do you assess fund manager skill?
- What role does luck play in investment returns?
Statistical noise can mask true skill.