It's Not the How or the What but the Who

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The Odds Are Against You

We’ve all heard the stories about the chimpanzees, children, cats, and blindfolded dart throwers who have selected stocks and handily outperformed professional money managers. In the most recent study, researchers from the Cass Business School at City University of London compared 10 million “monkey” indices (that is, ones randomly created and weighted by a computer) to market capitalization weighted indices (that is, the ones investment gurus now recommend over actively managed funds) and found that the monkey funds won every time.¹

Unfortunately, most people aren’t much better than monkeys at people-picking either. If you measure interviewer effectiveness by calculating the correlation between their assessment ...