A couple weeks ago I looked some of the reasons behind the fact that smart money tends to chase past performance. I received a couple of good follow-up questions from people in the industry who were curious about my thoughts on how to judge a portfolio manager or investment process.
Putting together a portfolio using a manager-of-managers approach is extremely difficult. Not only is it tough to beat the market, but it’s also very hard to put together the right type of organization and team in place that can successfully perform the due diligence and monitoring required to judge a group of money managers.
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