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We’re speaking of a chat application...
Source for this? It would make sense to me if your claim was that future performance for this cohort is average. But, you seem to making a stronger claim -- that is, this cohort of outperforming funds performs worse than average going forward.
Here are a couple articles that try to analyze the phenomenon [2][3].
[1] https://www.bogleheads.org/wiki/Mean_reversion
[2] https://peeranalytics.com/2018/05/21/hedge-fund-mean-reversi...
[3] https://www.valuewalk.com/2015/05/hedge-fund-mean-reversion-...
A quote from your second source: The average subsequent performance of the historically best- and worst-performing long U.S. equity hedge fund portfolios is practically identical and similar to the market return.
A quote from your third source: Due to hedge fund mean reversion, yesterday’s nominal winners tend to become tomorrow’s nominal losers.
So, it seems like there are differing conclusions based on how you slice the data. I'm familiar with mean reversion, but I don't understand why this would predict underperformance for outperforming funds. If you flip a coin 10 times in a row and get heads 10 times in a row, you don't expect to get heads less than 50% going forward (but do expect the average rate of heads to trend back towards 50% over time).
Furthermore, if OP's strong claim ever held true, surely there would be funds that outperform by simply indexing the broad market minus the holdings of top performing hedge funds. As more and more money gets invested in these new inverse fund, the pattern the strong claim is based on would slowly cease to exist. Unless you're saying the underperformance is due to fraud or exorbitant fees.
https://www.ifa.com/articles/despite_brief_reprieve_2018_spi...
That means it is very, very hard to outperform.
Then, if you do outperform, that tends to be an exceptional year followed by not so great results.
https://www.morningstar.com/articles/1017292/what-to-expect-...
Key comment:
"Of the 123 stock funds that gained 100%-plus between 1990 and 2016, just 24 made money in the three years following their big gain, with the average fund losing around 17% per year."
Now, is it possible that ARK is an exception - of course. But the math would tell you that is highly unlikely.
Interesting to pick up on how she maps investments across "innovation themes" like robotics, AI, etc admittedly without deep domain knowledge herself, depending on the input of analysts.
I'm confused, is this an objectionable statement? A lot of people seem to treat 3d printing as something truly special and unique, but actually 3d printing is a form of CNC; additive rather than subtractive like a CNC mill, but a form of CNC nonetheless. It's a technology firmly rooted in a broader tree of established technologies.
I guess some people think of these machines as printers foremost, and thus perceive a huge conceptual jump or paradigm shift from 2d desktop inkjets to 3d printers. If somebody comes from a computer background rather than a manufacturing background, it's easy to see why this framing might be chosen. But I don't think that's the right way to look at 3d printers. Rather, 3d printers are the synthesis of two already well established concepts in manufacturing: making things by adding material, and controlling machines using computers.
Edit:
> Wouldn't 2D printers then also be a subset of autonomous technology and robotics?
The modern familiar forms of 2d printers are such a subset, yes (and I never implied otherwise.) These machines were preceded by other forms of 2d printing which are not autonomous but were nonetheless mechanical. They were also preceded by autonomous forms of 2d printing that didn't fit inside your living room, but were nonetheless familiar technology to the general public (because everybody knows books exist.) I believe this is the reason 2d printing is generally considered more mundane than 3d printing, which is treated like sci-fi technology that came out of left field. Again, understanding the historic context of these machines gives us insight into the reasons they are perceived the way they are.
Your point here about CNC and additive versus subtractive manufacturing is also near to my hobbyist interests.
Extending the idea a bit, I suspect the history of social changes that resulted from the advent of the printing press are an entryway into understanding the public's reaction to social media today.
Aside from living through the history, can you recommend a way to build more of this knowledge? If it's a matter of being widely read do you know of something like a survey introductory text?
I will google more, but thought I'd ask.
But from another angle, printing and publishing paper is a different industry than manufacturing objects, so the distinction is in their context
Also known as 'automobile' or 'motor vehicle.' Cars are really just a subset of automobiles. It's less weird when you phrase it like that, using established terminology, right?
