Two reasons for this according to academics

If, for the majority of managers, the decline in the markets is far from being a blessing, or even a calvary, it is almost good news for a minority of them. These are the managers that deviate the most of their reference index and stand out from the rest of their colleagues ("peer group"). In other words, the less likely to average behavior. While investors natural inclination is to try to limit the damage in these sensitive configurations and paste to the rest of the "herd", some managers are evidence of more daring. Pay recklessness for a minority.

"The herd behavior of little talented managers is stronger in the periods of decline in the stock market, because their risk of failure and loss of their employment increased strongly." Conversely, the talented managers will want to distinguish themselves from the rest of the market. "Invest differently (on values neglected...) allows them also to be less affected by the sales of securities made by the mass of other managers", noted researchers in their study (1). It reveals that when the stock market falls, the most daring managers dig the gap with the rest of their colleagues, which is not at all the case when actions are progressing.

The influence of the "stockpicking."

Thus, on very long period (1980-2008) and in the stages of decline in the stock market, the difference in annual performance between the 10 less average managers and 10 the average goes from 4.5 to 6.1, after taking into account their level of risk and management boards. The first derive most of their difference in performance of their choice of values ("stockpicking") or sectors, and not their ability to while predicting the ups and downs of the market ("market timing"). They are thus better than others to build on the good companies, where the fall in prices is the most irrational and excessive.

Two reasons for this, according to academics. First, in difficult circumstances, companies tend to make the retention of bad news. Resulting schematically by less information that arrive on the market. Managers whose companies analysis is the finest and most complete dig so the gap with the rest of the financial community.

Then, the received ideas, there is more speculators and speculation in markets on the rise in downturn, because speculating downward is much riskier and requires high skills (short sale). With less speculative "noise" on the price, which does not even less volatility, fundamental managers are favored and benefit. Must be that their customers have too of the nerves of steel, that they do not fear and out of their money in these sensitive periods. In any case, important commissions that customers pay for this type of managers, which may seem excessive in normal times, seem still well-deserved crises, given high performance that they emit.

With "hedge funds", work (2) show that, during the phases of withdrawal markets, quantitative managers - who work with models - with better performance than the managers "in the flesh and bone". The first drop in average that of 2 per year, while the latter just 16 over a period of analysis from 1990-2009. In the recent financial crisis, between January 2007 and March 2009, the Fund "traffickers" recorded a 3.3 annual gain, while discretionary managers lost on average 4.8 per year.

The machines are not States of mind or feelings. They did not feel the fear, which no doubt avoid "emotional" errors when markets are falling. One of the main of them is to postpone its sales in the hope of a rebound, which of course can't... Their liabilities, however, the machines can lose their bearings when the environment changes radically, as after the bankruptcy of Lehman Brothers.