From the Wall Street Journal (emphases added):
A manager may do the right things and get bad outcomes or do the wrong things and get good outcomes. So investment results can be very deceptive.
The better way to do it is to focus on the process of decision making that managers use and to look for numerical measures that can be proxies for that.
The one that is the most interesting candidate currently is “active share.” Active share is a measure of how different your portfolio is than the benchmark to which you are compared.
Good investors “focus on the process of decision making” and this is what professionals should emphasize internally and with clients. This concept is why credible investing professionals should never sell – and responsible consumers should never buy — things like a portfolio or performance as standalone items.
The idea “how different your portfolio is than the benchmark to which you are compared” is a direct result of the decision making process. Being different is how an investor can add value. Being different usually results from independent thinking. The idea also demonstrates why one should not create a benchmark to match a portfolio.