Let’s say someone has designed an strategy to pick stocks or some other financial product that, according to my forecasts, will provide a return of 20%. So you give them a million dollars and put me to work. They start following the strategy they devised and spend a lot of time buying and selling as it dictates.

Then let’s say a few months down the line they’ve decided to change their strategy, having come up with a new idea about what will really get the best return, this time forecasting they’ll do even better based on the models they made before. So now they want more money to put into this new strategy.

Oh, but now they think they want to change strategies again, maybe even to something that’s actually opposite of what they were doing before in some ways. Let’s put more money into that!

All this while they’re so busy buying and selling and adjusting the models based on various hunches they have, they haven’t actually paid much attention to how much the portfolio is actually worth.

When you ask how the changes they’ve been making have impacted the portfolio, and whether anything they’ve done is actually getting to that 20% goal, they say they haven’t really paid much attention to it because they know the new models are going to be even better. Are you going to give them another million?

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