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Brendan Byrnes: I think one of the amazing things right now in the financial world is there's no accountability, really, as far as people go on CNBC and they'll say, "Buy [Research In Motion], sell Apple," but no one is really checking that.
One of our co-founders, David Gardner, is really big on what he calls "moneyballing" in the financial world -- [Moneyball], the book by Michael Lewis, and then the movie -- but there's no accountability there, which is pretty amazing.
What you find is that financial experts may be not quite what they're cracked up to be. What did you find about them?
Jack Schwager: That was the first chapter I begin the book on. The catalyst was really looking at the Daily Show controversy with Jim Cramer.
I was just curious: Is Jon Stewart being unfair here, picking on Cramer? Cramer was a good-performing hedge fund manager, but I found an academic study that actually looked at it, and it turned out that the effect really was overnight. You couldn't get it unless you had the stock before, and actually the picks really didn't beat the market; in fact, they did a little worse.
I said, "But that's only one person over a certain period." I looked at much broader examples, and one of the broadest ones, I got the whole database from Hulbert Financial Digest, who tracks all the market newsletter writers.
I took 30 years of his data, and it turns out for the whole group -- and these are guys who are selling their letter for money, presumably because they're giving you advice on how to make money in the markets -- and as a group they did significantly worse than the market.