Is there such a thing as smart money?

Most pros don’t beat the market either, and this has been true for decades. Since 2000, there have only been three years in which a majority of large cap funds outperformed.

In the 2010s, on average, 8 out of 10 mutual funds and 9 out of 10 institutional funds underperformed in the US markets, after fees. 

Still, a narrow elite does produce consistent returns, which requires a fine balance. The most successful ones have a disciplined system for anticipating markets — and the flexibility to change when conditions change. 

They understand that analysis is important but temperament is more so.

Experience matters and they have developed the skill to maximise gains when they are right, which is typically 60 per cent of the time, and to cut their losses the other 40 per cent of the time. 

They have a view and stick to it, right up till the second it no longer makes sense.

These, however, are the qualities of investment legends.

Ruchir Sharma Financial Times 8 October 2023

https://www.ft.com/content/4a1492b1-fef6-4a1d-aa98-3ff5a1aad510