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My apologies to the chimpanzees out there

Raven, a six-year-old chimpanzee, became the 22nd most successful money manager in the USA after choosing her stocks by throwing darts at a list of 133 internet companies. The chimp created her own index, dubbed MonkeyDex, and in 1999 delivered a 213 per cent gain, outperforming more than 6,000 professional brokers on Wall Street.

A great example of bias data selection.
What would your intuition tell you if you read this. Take it on face value and invest in the MonkeyDex.
This data point is probably an best result of the Monkey Manager portfolio and was selected as a sensational news story, or this was just one lucky monkey.

Compare this result to the average human money manager and the chimps win hands down. In 2014 86% of the money managers underperformed the S&P index, a trend that has been slowly increasing over the years. What does that tell you?

First of all it tells you that Warren Buffet was right and you are better off putting your money in a index fund rather than some kind of managed fund. But again that is not the whole story.

The Monkey Managers only picked a few stock by throwing darts before thy started throwing them at their handlers. Their portfolios were smaller, thus riskier, thus more volatile. Compare this to small targeted funds and the performance is a slight edge to the money manager. The net results is that human intuition is slightly better than monkey randomness when it comes to stock pick.

Another factors is the nature of sector/trend funds is that they are just that, focused on one target right or wrong, and they ride the waves up and down. Taking a boarder perspective you can benefit over time by looking for macro trends. Global warming, more moisture in the atmosphere, more hurricanes, bigger waves..... bet on volatility in the sector
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