This segment features a study published in the Journal of Finance called, “The Selection and Termination of Investment Management Firms by Plan Sponsors” and two accompanying charts that show the returns of managers before and after they are hired by a plan sponsor. Many managers are hired based on their past performance of beating their benchmarks, but the study shows that these managers underperformed their benchmarks in the three years after being hired. Their past success was luck, not skill. On the other hand, those who were fired performed better. The fired beat the hired!