Darwinism for markets

It is more important than ever for funds to evolve according to the natural order of markets. The age of investment Darwinism has begun, writes Joe Roseman.

I cannot tell you where the US economy will be in one to two years’ time. However, without even checking, I can predict with assured confidence what the consensus expects for GDP growth in 2012 – 13. 3% is my guess. How did I arrive at that guess? Since available data in 1993, the consensus forecast for US GDP growth in one to two years’ time has, pretty much, always averaged 3% with just a 0.5% standard deviation around that mean. The lowest growth the consensus has ever expected for a one to two year-ahead forecast has been 2%, and the highest has been 4%. Most of the time, the cons...