By Howards Mark
The Most Important Thing
The key to this matrix is the symmetry or asymmetry of the performance. Investors who lack skill simply earn the return of the market and the indicates of their style. Without skill, aggressive investors move a lot in both directions, and defensive investors move little in either direction. These investors contribute nothing beyond their choice of style. Each does well when his or her style is in favour but poorly when it isn't.
On the other hand, performance of investors who add value is asymmetrical. The percentage of the market's gain they capture is higher than the percentage of loss they suffer. Aggressive investors with skill do well in the bull markets but don't give it back in the corresponding bear markets, while defensive investors with skill lose relatively little in bear markets but participate reasonably ...
...
