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Finance- Your Broker Commented That Well-managed Firms Are Better Investments

Submitted by • October 4, 2018

Your broker commented that well-managed firms are better investments than poorly managed firms. As evidence your broker cited a recent study examining 100 small manufacturing firms that eight years earlier had been listed in an industry magazine as the best-managed small manufacturers in the country. In the ensuing eight years, the 100 firms listed have not earned more than the normal market return. Your broker continued to say that if the firms were well managed, they should have produced better-than average returns. If the market is efficient, do you agree with your broker?

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Voted by Simon Brooke

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