Unconditional measures can incorrectly measure alpha and beta when portfolio managers engage in dynamic trading strategies or change their alphas and betas in response to publicly available information about the economy. The authors advocate continual performance evaluation (CPE) to measure dynamic alphas and betas. Comparing a sample of 261 manager portfolios over 1980–1996 to the Russell 3000, they find that a portfolio of the top quintile of CAPM alphas outperforms the bottom quintile by 1.45% annualized, while the spread for quintiles of CPE alphas is 4.00%. When style indexes are used to compute alphas, the spread between top and bottom quintiles of CAPM alphas becomes a erverse-2.41% annualized. On the other hand, the top quintile also outperforms the average manager by 1.70% and the Russell 3000 by 2.42% annualized. While higher CPE alphas do not guarantee superior returns, they are more likely to successfully forecast returns than CAPM alphas.

This article presents evidence on persistence in the relative investment performance of large, institutional equity managers. Similar to existing evidence for mutual funds, we find persistent performance concentrated in the managers with poor prior-period performance measures. A conditional approach, using time-varying measures of risk and abnormal performance, is better able to detect this persistence and to predict the future performance of the funds than are traditional methods.

L ike it or not, it is difficult to ignore past performance in the evaluation of investment managers. Dramatic reversals in a manager’s performance may occasion observation that the manager was due for a rebound. Implicit in such a statement is a perceived relationship between past and future performance. The generally unspoken rationale for studying performance is that embedded somewhere in historical return data is a forecast of future performance. Put bluntly, however, if there is no information in a manager’s past performance about likely future performance, then collecting data and analyzing historical performance is a useless enterprise, even if performance measurement is heralded as being central to the manager selection process. This problem is the central focus of this article. Our objective is to explore manager return series and to identify, if possible, exploitable patterns or exploitable characteristics in the return series. Reliable performance patterns can improve the management of multiple portfolios as well as lead to profitable trading strategies. The absence of patterns would suggest it will be difficult to form useful conclusions based solely on performance analysis. In other words, reasons for abnormal (above market) returns must be found elsewhere.

There is little consensus and some degree of confusion over the meanings of the polarity and polarization concepts. An argument is advanced for viewing these phenomena as distinctly separate with polarity referring to the distribution of power among states and polarization referring to the tendency for actors to cluster around the system's most powerful states. An analysis of indicators constructed to operationalize the two concepts reveals that the global political system was characterized by military bipolarity throughout the 1948-1973 period but that the level of bipolarization gradually declined from "high" to "moderate" to "low" until 1972, at which point the constructed indexes indicate the absence of bipolarization. These findings confirm the paper's premise that the condition of bipolarity need not imply the presence of bipolarization.

This paper compares Galtung's theory of imperialism with the more complex global network views of Dominguez. Galtung's theory states that economic, political, military, and cultural transactions are vertically fused into a “feudal structure” such that the center nations dominate all facets of transactions. Moreover, since vertical fusions on one dimension spill over and structure other dimensions, high degrees of system isomorphisms should be observed. Dominguez, on the other hand, suggests that actors will be found in different networks on different dimensions of interaction. Data on trade and diplomatic visits are analyzed. The findings tend to support Dominguez's views of network structure and challenge the imperialism theory of Galtung. Although the networks are similar, they are not highly isomorphic, and transactions occurred where Galtung's theory predicted they would not.