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I wasn’t really aware of the Ira Sohn Conference, but some very big names were there. As Richard Posner pointed out, however, intellectual reputation invariably lags achievement, so the biggest names almost by definition are over the hill. A great example of this was Ronald Coase, who remarked upon winning the Nobel Prize in 1991, “it is a strange experience to be praised in my eighties for work I did in my twenties.”
In any case, last year’s recommendations generated an average return of -8%, but the year prior was up 22%. Thus, net over two years they returned a little less than the S&P500 over that period, adding yet another datapoint to the observation that advisers slightly lag the passive indices. On the bright side, Jim Chanos had two home-run picks–shorting VWS and FSLR–which will probably be sufficient to generate hope that while on average these recommendations are no good, if you pick the right ones, you can make a fortune.
Such is the perennial problem with advice, in that on average it is unhelpful at best. Like education in general, trying to obtain wisdom given everything people have done and written is not straightforward. Surely reading such information is essential because no one could come up with all those insights by themselves, but unfiltered such data is no more informative than pop culture. A lot of people with good intuition actually start ignoring such advice rather early because they see the diminishing marginal returns, why humans clearly become wiser from 0 to 30 then pretty much level off on average. I suspect it’s like Sturgeon’s law (ie, 90% of everything is crap), in that those who like to take a lot of advice or read a lot includes some who are very wise and who have learned much from the past and others; but most highly educated people are don’t understand that they aren’t necessarily becoming wiser because they choose the bad gurus, or build upon bad assumptions.
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