A case where 10 years of practice… makes no impact at all.

The 10000 hours rule or 10 years of practice made popular by Malcolm Gladwell received already some dents (check also here and here), but this research shows that in at least one case 10 years of experience makes no difference at all: “However, surviving managers of any tenure—even those who manage their funds for 10 or more years—generally do not outperform the market or their style benchmarks and do not display consistently superior performance.”

The study is on the career paths of mutual fund managers and was published in the Financial Analysts Journal by Gary E. Porter and Jack W. Trifts. They conclude: “Managers whose tenure was at least 10 years outperformed their shorter-tenure counterparts, but their performance was not consistently superior. Data on monthly style-adjusted returns show that solo managers with 10 or more years of tenure outperformed about as often as they underperformed.”

Download the paper here.

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