The GMO track record brings to mind one of my pet peeves: the fawning interview beginning with "He called the 2008 financial crisis" (or dot com bubble) or words to that effect. All this tells me is that the article is addressing gullible people. Maybe the guy said on the record that if something bad happens here then something else really bad may happen, and then took credit for a prediction after it played out that way. With no clear definition of called, I'm guessing half the people on this board "called the crisis".

But let's say he called the 2008 crisis clearly and unambiguously. You will often find that he also called the crisis of 2007, 2006, 2005, and so on. Eventually he gets it right and takes credit.

OK, but let's say that he specifically called 2008 (within a few months, let's say). Nailed the bottom. You still might regret following this guy's advice, since he probably stayed bearish way too long. People basking in the glow of a brilliant bearish call are naturally reluctant to abandon it, even as prices start to recover. A bear trap rally, they will claim. They're too smart to fall for it, and they miss the huge recovery.

OK. But now let's say that he hit the trifecta: Made a one-time and clear market top call (within a few months), and then made the corresponding correct market bottom call (within a few months). Impressive. Congratulations are due, maybe with some envious glances.

But now the biggest question of all looms: Was it due to skill, or just a few lucky calls? How do you distinguish between them? I don't have a crisp answer, other than that a long track record seems more reliable than a short one.