Source: Chief Investment Officer
Hierarchy of Investment Skill
March 23, 2015 9:30am by Barry Ritholtz
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Since most active managers can’t keep pace with active beta, there must be some basement tiers to this pyramid. The pyramid itself implies increasing levels of skill above indexing for the universe of managers, but we know from the data that there is actually negative skill with respect to the index. It is all not just index minus investing costs since numerous studies have shown that many of the higher cost funds actually lag by more than their costs.
Interesting to think about that in terms of the lessons from your following post: “What March Madness Can Teach US About Investing & Trading”. (Spoiler alert: Nobody knows anything and if you think you do you’re even worse off.)
The pyramid doesn’t address the skills that can be attributed to their marital status either
http://money.cnn.com/2015/02/27/investing/hedge-funds-marriage-divorce/index.html