There are no buzzer beaters in the mutual fund industry. Theoretically, a trade completed at 3:59:59 may be considered a last-second shot, but it lacks the emotion and drama of, say, North Carolina State's last-second dunk to nip Houston in the 1983 national championship contest.
But
A team like Gonzaga, which has previously complained about receiving a lower seeding in the tournament because it plays in the low-profile, weaker-teamed West Coast Conference, is a lot like a small-cap value fund. Both, while sporting an exceptional absolute return, pale when matched up against their peers.
Anybody can pick the T. Rowe Price Equity-Income fund and not "wow anyone at a cocktail party," Kapoor writes. He compares it to picking Duke, a safe bet to make the final four, that, yes, did make the final four this season.
Kapoor's last point is perhaps his most poignant. Just because a team starts a winning streak right before the tournament does not mean it is a sure bet to make it all the way to the season's last weekend. Maryland, Kapoor writes, won its conference tournament, only to lose to lower-ranked Syracuse early in the 2004 tournament. That compares to people who bought the red-hot growth fund in the late 1990s. "All hot streaks must come to an end," Kapoor writes.
Who said there are no parallels between sports and mutual funds?