The Next Hot Fund Manager

Still not convinced that the big returns you occasionally see from stock pickers and fund managers are the result of luck rather than skill? A Russian financial magazine reported this month that it has identified a money manager whose extraordinary stock picking beat more than 94% of professional fund managers last year.

Her name is Lusha, and she’s a circus chimpanzee.

At the beginning 2009, the magazine’s editors presented Lusha with 30 cubes on which were written the names of stocks. They asked her to choose eight of them, and her picks tripled in value during the year. According to a report in the UK’s Daily Mail, Lusha focused her picks on banks, a shrewd forecast. Her play on mining resulted in a return of more than 150%, though she missed out on the telecommunications sector, which rose 250% during the year.

Apparently Russian fund managers are not amused: “’If the experiment had taken place a year earlier, the monkey would not have had enough money to pay for her bananas,” one fumed. We beg to differ: if Lusha was charging her clients a management fee of 2.5%, we think she’d have done just fine.

3 Responses to The Next Hot Fund Manager

  1. kyahgirl January 26, 2010 at 12:10 pm #

    This is hilarious…thanks for the laugh.
    And I can just bet the fund managers are upset…the are in danger of being exposed 🙂

  2. moneyxyz January 26, 2010 at 1:14 pm #

    The guy who is teaching my csc vol 2 prep course seems to think that you can time the market and he said he made so much money shorting nortel stock. He works in the industry for a mutual fund company as VP sales. However, I read the little book of common sense investing by john bogle and he convinced me that it’s best to index. My whole RRSP is invested in low cost index funds. However, I’m wondering if maybe I had more time to analyse stocks, if I could have better performance than the index. Probably not.

  3. Canadian Couch Potato January 26, 2010 at 3:00 pm #

    The VP of sales for a mutual fund company believes that timing the market is a good strategy? You may as well ask your barber if he thinks you need a haircut.

    Having just finished the CSC myself, I was surprised how little of the course material discusses indexing as a valid strategy. Meanwhile, there is a whole chapter on technical analysis, which even many stock pickers denounce as nonsense. And another whole chapter on segregated funds, which are almost always terrible investments. Pretty much every financial advisor starts with this course: no wonder investors are so poorly served by the industry.

Leave a Reply