Is Being Good the Secret to Being Great?
Not, it seems, with stock mutual funds.
The Road to Heaven
A quarter-century ago, hedge fund manager Howard Marks argued that investment managers are better off being consistently good than trying to be occasionally great. This claim has recently come to the forefront, as AQR's vocal and visible leader, Cliff Asness, has been citing it admiringly.
Wrote Marks, "I feel strongly that attempting to achieve a superior long term record by stringing together a run of top-decile years is unlikely to succeed. Rather, striving to do a little better than average each year--and having the discipline to have highly superior results in bad times … is more likely to work."