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Individuals from less privileged backgrounds may face higher barriers to entry into prestigious positions, meaning only the most skilled advance and succeed.


In Family Descent as a Signal of Managerial Quality: Evidence from Mutual Funds (NBER Working Paper No. 22517), Oleg Chuprinin and Denis Sosyura find that mutual fund managers from poor families consistently achieve better investment results than fund managers from wealthier backgrounds. The researchers also find significant differences in promotion patterns and trading styles between these two types of fund managers.

Previous studies about the relationship between managers' upbringing and their performance have focused on educational differences, including whether the managers attended elite universities or had access to education-related networks of influential people who could later help boost their careers. Such studies tend to find that managers with a stronger educational background tend to deliver better performance.

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The Long Road Of Proving Yourself As A Investor

A reader asked the other day, "How much time do you need before you can separate skill versus luck in investing?" 

My answer was "probably 20-30 years," which he found astounding. He thought I'd say five years. But here's my reasoning. 

If a doctor performed one successful surgery, you can be pretty sure he's an expert. If he does one successful surgery every day for a year, he clearly knows what he's doing.

Investing is different. There are thousands of stocks, and at any given time, a fair number of them will be exploding higher. With millions of investors, some will be holding disproportionate amounts of those winners at any given moment. It can take five or 10 years of successful returns for an investor to make a case that results aren't entirely due to chance.

But even then -- with, say a 10-year track record of success -- an investor can't claim expertise. Or at least reliable expertise you'd expect from a doctor or an engineer. That's because the world is always changing, and th

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Let The Car Do The Driving: Mobileye IPO

Under the heading of "cool but creepy", Mobileye (MBLY), whose software and applications enable hands-free driving, debuts today on the NYSE.

Mobileye’s proprietary software algorithms and EyeQ® chip (now in its 3rd generation) perform detailed interpretations of the visual field in order to anticipate possible collisions with other licensed vehicles, pedestrians, animals, debris and other obstacles.

They posted rapid revenue growth of late and reported a $19.9 million profit last year, reversing a year-earlier loss, according to its prospectus. Its products were installed in about 3.3 million vehicles through March 31 and obviously growing.  They have also filed 15 patents thus far on their technology including several on their collision warning systems which one would believe is where the true value lies from a buyout perspective.

With more than 15 years of research and development and data collected from millions of miles of driving experience present a significant technological lea

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The Cost of Robbing Peter To Pay Paul

Reprinted from http://mauldineconomics.com

Would the Real Peter and Paul Please Stand Up?

By Dylan Grice

1290107?profile=originalIn a previous life as a London-based ‘global strategist’ (I was never sure what that was) I was known as someone who was worried by QE and more generally, about the willingness of our central bankers to play games with something which I didn’t think they fully understand: money. This may be a strange, even presumptuous thing to say. Surely of all people, one thing central bankers understand is money?

They certainly should understand money. They print it, lend it, borrow it, conjure it. They control the price of it... But so what? What should be true is not necessarily what is true, and in the topsy-turvy world of finance and economics, it rarely is. So file the following under “strange but true”: our best and brightest economists have very little understanding of economics. Take the current malaise as prima facie evidence.

Let me illustrate. Of the many elemental flaws in macro

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