The efficient market hypothesis (EMH) is touted by many retirement advisors and financial planners as an orthodoxy that tells investors that, whatever they do, they should avoid active funds.
Have you heard self-driving cars are going to replace normal cars in 5 years? If you have, so did I—in fact, I first heard this about 7 years ago. Which is funny, because self-driving cars still aren’t really here, except in some very small fringe cases that are still rare enough to be newsworthy.
A big story happened to a small-cap company recently, when Comscore (SCOR) CEO Byran Wiener and President Sara Hofstetter suddenly announced their departure from the firm. A flurry of sell-side reports followed, largely positive, reiterating their optimistic view on the company.
Imagine for a minute that you’re a financial analyst at a hedge fund. You’re paid well, but you’re paid much, much better if you provide recommendations that outperform. How, then would you make those recommendations to perform as highly as possible to in turn be compensated as well as possibly?
Aspiring financiers are often blindsighted by the reality that banking is, ultimately, a people job—that is to say, an industry in which relationships, connections, and interacting with customers, clients, and vendors is the most valuable skill of them all.