Do you think many funds have a repeatable value adding process?
(Probably ignoring any market neutral outfits for this, my intuition tells me any returns they generate are much more statistically significant, but could be wrong)
Consider John Paulson...he and his team made a fantastic set of discoveries that led to theirin the run up to the crisis, but AFAIK his performance hasn't been particularly impressive since.
Back then, they happened to be looking in the right place. Is it really possible to distribute your information processing resources (analysts) in such a manner that you consistently chance upon the right place?
There are definitely firms which have a strong track record over a decent period of time, but are there really more than you'd expect from just survivorship bias? Given the thousands of funds that have been started over the decades you'd surely expect some to do very well over time purely by chance even if all of them were constructing portfolios completely randomly.
I'm interested in the industry but also quite skeptical, hoping any professionals could shed some light. (Sorry about another student-y question)