Few dumb questions :
- if we are planning to copy moves of mutual fund managers, before doing that we need to ensure that we are copying bright students in the class and not the last benchers , otherwise we may also fail like them. So what many recent surveys say that Big Boys are failing big time in their game. They are not even able to beat theiir indices too. And those who are beating indices, keep on changing every year. So whom to copy and in which year?
- Another aspect is , lets say their picks are good and they are faultering , not because they are doing inadequate research, but due to their behavior biases and also due to systemic issues. They may not want to sell the stocks, but due to redemption pressure, they have too. Even on buying side, they may not have a solid conviction about a particular stock but since invetors are giving them so much cash and their mandate doesn’t allow them to sit on cash…so they have to buy less conviction bets too. In short, their buying and selling decisions can be entirely based on environmental factors rather than on that specific company basis.
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