... I need something from an authoritative source ...
Well, er ... I don't know that I can come up with a source that's more authoritative than a Nobel prize winner.
or than the Standard & Poor's organization.
Take a look at this guy:
https://en.wikipedia.org/wiki/Charles_D._Ellis and see what you think. If you like him, read his book
Winning the Loser's Game. His thesis is that there are so many brilliant money managers, each with vast resources and virtually unlimited information, that they cancel each other out. The result is the random and unpredictable results we see.
Also, let me try another way; a way that requires no authorities but rather relies on simple logic:
Let's hypothesize that there is a manager out there who is differentiated from the 10,000 monkeys flipping coins by actually having some persistent skills. Fama and French freely admit that such animals may exist; they have just not been able to identify them.
So why would such an person be putting on a suit every morning and slaving away for a company that is selling his skills for maybe 75 basis points? Logic argues that he wouldn't be. Right out of the box, he may have taken money from a few accredited investors and used it to build a small fortune for himself and for them. Once he hit his threshold, he would have gone on his own and used his skills to make himself as rich as he cared to be. He would do this from a beach on a pleasant tropical island. Visualize him lying there being hand-fed peeled grapes and drinking from a glass garnished with an orchid or a little paper umbrella. Logic says that you will never find these animals working long-term for retail mutual funds. Hence, if they exist at all, they will not be accessible to us. We are stuck with the monkeys. Or with passive investing.
(I know, I know: It could be a him or a her. I am just too lazy to craft asexual rhetoric.)
... why not try for yourself?... allocate some real money that you feel comfortable with, and say, for the next 5 years, see how well you perform by trying to use "The Best" manager(s) you can find and compare that with a control (a lazy portfolio, for instance). That way you can draw a real life, personal conclusion.
Sounds like that was the path Oldshooter took over the past 25 years. Trail and evaluate. ...
Yup. The first hot manager I chased was a guy named Kurt Lindner in Kansas City. (
Kurt Lindner, 72 - Built Mutual Funds - NYTimes.com) This was probably in the late '70s. None of my chasing ever found persistence. (Amusing factoid: Back in those years I looked at Fidelity Magellan but decided not to invest because at $800M I thought it was too big to be successful. Bad roll of the dice that time!)
Note that you cannot simply pick some funds today and go back to check results compared to five years ago. This is due to "survivorship bias." Too complicated to get into in detail here but the punch line is that the majority of funds you might have chosen 5 years ago have gone out of business or merged due to poor performance. (
https://www.ifa.com/articles/survivorship_bias_things_are_not_as_good_as_they_look/)
Another interesting facet is the emergence of fund "incubation." (
Incubated Fund) Clever guys, these hucksters. With an incubated fund it is easy to see that a successful history is meaningless.