Competition among portfolios takes place in a market that changes as well, with the changes having different effects on the investors, for example:
These things can move around in ways independent of the strategies of investors, although changes in strategy definitely can push these factors around, and vice versa. Certain portfolios end up better positioned than others to take advantage of market developments. Portfolios that do find themselves in good position to buy the right assets at the right time often seem, to others, just lucky. But good planning—the building of a flexible and inexpensive funding base, the prudent use of leverage, and management of the accounting and regulatory environment—can make its own luck. As Branch Rickey, the storied leader of the Brooklyn Dodgers baseball team often noted, luck is the residue of design.
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