Ep. 359: Campbell Harvey Interview with Michael Covel on Trend Following Radio
Michael Covel's Trend Following
00:00
The Reverse of Survivorship Bias
There's clearly a piece of luck at play. The people, the winners are the ones that don't survive. Some very skilled investment managers drop out because they've had bad luck. That's kind of a reverse of survivorship bias. This is pretty important that this idea doesn't just apply to investment managers. Let me discuss just for a minute another research paper I have that does a psychometric survey of CEOs. What my paper finds is that CEOs are hugely more tolerant of risk than the lay population. By factor of 10, it's extraordinary. You can think of a scenario where these people that are very tolerant of risk enter a firm as a junior employee. They take a lot of
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