Equity Research is very time consuming, and in the case of sectors like Tech and Pharma, also requires industry knowledge, which most investment professionals do not possess.
Lack of process discipline and short-term performance pressure further compound lack of knowledge into a bigger investment problem. The end result is a collection of investment managers who like to advertise “fundamentals-based” investing to their (unsuspecting) clients, but actually have neither the desire nor the resources to accomplish fundamental analysis. It shouldn’t be surprising then that most active managers fail to beat market performance.
Disclosures and Disclaimer
