TY - JOUR T1 - Chasing Performance and Identifying Talented Investment Managers JF - The Journal of Investing DO - 10.3905/joi.2018.1.067 SP - joi.2018.1.067 AU - Robert Ferguson AU - Anna Agapova AU - Dean Leistikow AU - Joel Rentzler Y1 - 2018/02/06 UR - https://pm-research.com/content/early/2018/02/05/joi.2018.1.067.abstract N2 - A common refrain from investors is that they have bad luck in hiring investment managers. Their managers’ post-hire performance tends to be disappointing relative to their pre-hire performance. This may be because of performance-based hiring and firing. The literature documents the practice of chasing performance. This article illustrates that the probability that a talented manager’s performance will exceed the best in a pool of untalented managers can be surprisingly small, even for long time periods; hence, chasing performance is unlikely to result in choosing the best managers. This article also provides a framework for mitigating the detrimental effects of chasing performance. ER -