Here's what a Nobel Laureate thinks about folks like Buffet and Lynch:
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When someone questioned him about the long-term record of active investment managers such as Peter Lynch and Warren Buffet, Miller pointed out that it only takes "one big score" to become a hero, that this jackpot run will keep the manager's average high for a number of years. He said the only way to prove that someone has devised a foolproof method for picking stocks is for that person to teach it to others, and see if their pupils can make the same gains. If the students do not reproduce the returns, then the manager's success can't be ascribed to anything more than sheer luck.
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About Merton Miller:
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Miller received the Nobel Memorial Prize in Economic Sciences in 1990 for his part of the "M&M theorem." Miller and Franco Modigliani, who received the Nobel in 1985, had worked together to establish a method to consistently value a firm. In the end, they found that the market value of a firm is independent of its capital structure - therefore, the proportion of equity and debt that the firm uses to finance its operations does not affect the value of the corporation. This was later modified to account for some of the market's imperfections.
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Source:
http://www.indexfunds.com/archives/articles/needham_tracy_20000626_modern_finance_founder_mert on_miller_dies.php
Buffet and Lynch are outliers.
FWIW.
Best,
Kurt