An interview with Professor Dr. Martin Weber, University of Mannheim
Investors overestimate the importance of skill and underestimate the role of chance in investment returns. That is the key finding of a study conducted by Professor Dr. Martin Weber of the University of Mannheim, Business School. In a short video interview, he provides insight into his study “Fooled by Randomness: Investor Perception of Fund Manager Skill.” Professor Weber found that most investors base their decision on past performances. However, they are “fooled by randomness” when chasing returns of actively managed funds. In addition, most investors do not take into account the actual abilities of the fund manager. Past returns are no guarantee for future returns. Professor Dr. Martin Weber is the holder of the Chair of Finance, with a specialization in Banking, at the University of Mannheim, Business School. His research focus lies on the empirical research on capital markets, experimental economics and decision theory.
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