Quadrant 1 is the noise quadrant. It’s composed of investors who believe in both market timing and superior investment selection. They feel that it is possible to consistently uncover mispriced investments that will deliver market beating returns. Also, they believe that it is possible to identify the mispricing of entire market segments and predict whether they will turn up or down. They rely on the same market to consistently misprice stocks and subsequently correct its mistake. As compelling as the idea of the “investment guru” is, the vast majority of active managers fail to even match the market, let alone beat it.