One of the the big issue in asset management is the illusion of financial skill. We cannot truly assess if we are good managers if we have the feeling we are good managers. We cannot make good decisions, if we have more confidence in our abilities than exists. There is often described as the cognitive bias called the Dunning-Kruger effect whereby individuals who perceive themselves as experts will have the illusion of superiority concerning their cognitive abilities.
In his book Thinking Fast and Slow Daniel Kahneman describe an experiment using 25 wealth advisors to see their correlation between their performance from one year to the next. That is, do the wealth advisors have any skill. The results were surprising. There was zero correlation between their performance rankings through time. We can not say whether these advisors thought they were better than others or that they deserved their bonuses, but we can say that they did not have nay persistent skill.
Whether discretionary or quantitative, we need measures to tell us whether we have nay skill. If you are going to play the investment game, you need performance measurement and a feedback mechanism to learn from mistakes.
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