#INVESTOR BEHAVIOR
Ask three hundred professional fund managers to rate their own skill: almost none will say they're below average.
Published on August 19, 2026
James Montier, then a strategist at Dresdner Kleinwort Wasserstein, gave nearly 300 professional fund managers a test of behavioral biases, including one simple question: “are you above average at your job?” 74% said yes. Of the remaining 26%, most rated themselves average — almost none ranked themselves below average.
Why is this figure statistically impossible?
By definition, only half of a group can be above its median. If 74% of managers rate themselves above average, at least 24 percentage points of them must be wrong about their own ranking.
In other words: the issue here isn't managers' competence — it's their ability to judge themselves accurately, a bias that affects professionals just as much as individual investors.
Three caveats, because they matter
- The sample is a panel of managers who attended the author's conferences, not a random draw of the whole profession — some selection bias is possible.
- The question asked for an overall self-assessment of “work,” with no performance benchmark tied to the test — it isn't a direct measure of the returns each manager actually achieved.
- The data date from 2005-2006, before the 2008 financial crisis; there's no guarantee the exact scale of the bias has stayed the same since, though later studies keep documenting the same overconfidence among professionals.
Why it still matters: conviction that you're right isn't a reliable sign that you actually are — professional or not. An investing discipline that doesn't depend on confidence in your own judgment protects you better than an extra dose of certainty.
For you
- Do you rate yourself better, average, or worse than most investors?
- Is that judgment based on a verifiable number, or an impression?
Source: James Montier, “Behaving Badly”, Dresdner Kleinwort Wasserstein, Global Equity Strategy, February 2, 2006.
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