From this month's edition of Value Investor Insight:
"This may sound heretical, but consultants are generally not very good investors. ... In consulting, you're trained to find the 'right' answer and tend not to acknowledge that your analysis might have been wrong. But when the market tells you you're wrong, as an investor, I respect how important it is to understand why that is."
- Shawn Kravetz, Esplande Capital (and former strategy consultant)
See also, investment bankers as hedge fund mangers:
I have to think that after about 10 years, an investment banker has spent too much time making a living off of privileged, non-public information to be able to survive without it.
Industry knowledge and contacts are a big plus, but I don't see how that can serve as the basis for long-term investing success.
I would add to this that the investing experience of many i-bankers I have known tends to be limited to municipal bonds. No further comment. - Ed
Management consultants should theoretically be good at figuring out which companies are best poised for future growth based on their intimate understanding of Porters Five Forces and the like.
Posted by: Big Mike | January 23, 2006 at 01:47 PM