(Forbes) Are Stock Advisors Worthless? Peter Cohan

2002 Nobel Prize winning Princeton emeritus professor, Daniel Kahneman, has confirmed my long-time bias. Kahneman is out with a new book, Thinking, Fast and Slow, and in an excerpt published in the New York Times, he did everything but come right out and say it: most stock market advisors have no economic reason to exist. Of course you don’t scale the lofty heights that Kahneman has without backing up such an assertion with a compelling argument. Kahneman was invited to speak to a firm that advised wealthy clients on their investments. To prepare for the talk, the firm provided him with the investment outcomes of 25 anonymous financial advisors over eight consecutive years. Kahneman analyzed the results and came to a conclusion that calls into question why anyone had paid these advisors. His statistical analysis showed that in the 28 pairs of years he analyzed, there was absolutely no correlation from one year to the next between the top-performing advisors. Read more