"Investors typically treat all ideas of excellent managers with equal deference. This is usually a mistake – even the most skilled managers are seldom equally skilled in all areas. Skilled managers may derive all of their risk-adjusted performance from a few specific areas, and under-perform in others."
Now, the question to you is what do YOU want? Do you want a catch all management company, or do you want to allocate your portfolio across a wide range of asset classes and investment strategies?
Overall, the article's point is the following:
- Investors wrongly assume that outstanding investment managers are skilled in all areas.
- Investment managers are rarely skilled in all areas.
- Most skilled managers derive the bulk of their risk-adjusted returns from a few specific areas of skill.
- Most skilled managers have areas of weakness.
- Even highly skilled managers may have areas where they can be predicted to generate negative risk-adjusted returns.
My only answer is diversify diversify diversify. That should tell you how I personally think. The rest is up to you, of course.
You can read the entire article here.