It is also an area where the private investor is at an immediate disadvantage compared with his professional counterpart. Unlike the big City institutions, such as pension funds, insurance companies and unit and investment trusts, ordinary shareholders are almost never given the opportunity to meet the people who run their companies, except perhaps at an impersonal annual general meeting. This distance puts a premium on interpreting what is said about managers by other commentators, be they brokers, journalists or competitors, and on the investor's own experience.
Bearing that in mind, there is still plenty of money to be made from backing the right management in the right circumstances. Often those circumstances tend to be clearly flagged up as turning points in a company's life.
One of the best sports of the 1980s stock market boom was spotting "shells": companies with few assets other than the fact that they were quoted on the stock market. Backed by big City institutions, new management would light on a shell ,sending the shares soaring as the market anticipated earnings-enhancing deals in store. Nigel Wray's Carlton Communications, Greg Hutchings' Tomkins and Nigel Rudd's Williams Holdings have all grown to become FT-SE companies by following this route, to the benefit of their shareholders.
Accounting changes and a swing in fashion away from conglomerates have made shells less popular with the City, but at Berisford Alan Bowkett is busy trying to recreate the glory days. Mr Bowkett, the son of a one- time coal miner, boarded this former commodities group in 1992, paying 48p a share for his stake. Since then he has scooped up Magnet, the fitted kitchens group, and Welbilt, a US maker of commercial kitchens. He has certainly done well - the shares were recently trading at around the 200p mark - but it has been a rocky road, with strikes and profit warnings along the way.
A more common feature of management stories in the more frugal 1990s have been company saviours: managers who have rescued or attempted to rescue the basket cases of the 1980s. People such as Archie Norman at Asda and the controversial Sir David Simon at BP both earned their spurs this way. Both men have since been lost to politics, but one very much still around in the business world is Stuart Wallis.
Plucked from obscurity at Rexam, the paper and packaging group, Mr Wallis sorted out the Fisons pharmaceuticals group where many others had failed. Fisons was one of the stock market stars of the 1980s which fell spectacularly from grace in the early 1990s. Like many entrepreneurs, its original saviour, John Kerridge, appeared unable to maintain the momentum of the company. Yet in the space of just over a year, Mr Wallis had pushed the share price from a low of 105.5p to 265p after attracting a bid from French drug rivals Rhone-Poulenc Rorer.
Sadly, things do not always work out so happily. At Sears, the young, well-groomed and charismatic Liam Strong pitched up in 1992 from British Airways to bring order to the sprawling retail empire created by Sir Charles Clore in the 1950s and 1960s. He left, an older and wiser man earlier this year having seen the shares underperform the rest of the stock market by 55 per cent and his strategy for the group in tatters.
In his place has come David James, one of the select breed of company doctors, whose usual remit is to hack off the gangrenous parts of the living dead of the business world until healthy tissue appears. For Sears, the surgery is still going on.
To be fair to Sears, it never was a 1980s stock market star. Others that were and have now become fashion victims of the 1990s include the Body Shop and Laura Ashley. Both companies have suffered at the hands of entrepreneurs, respectively Anita Roddick and Sir Bernard Ashley. In Laura Ashley's case, even a succession of well-rewarded company saviours has been unable to reverse the group's fortunes, culminating in the well-publicised ousting earlier this year of the pounds 1m-a-year Ann Iverson.
Laura Ashley is a stark reminder that a star rating as a manager does not automatically lead to share price outperformance. Many whose reputation went before them at the time become less impressive in the harsh light of hindsight. Professor Sir Roland Smith made his name as a sort of turnaround specialist in a string of companies during the 1980s. But his career fell off a cliff in 1991 when he was dramatically ousted as chairman of British Aerospace, which he had built up on the back of a series of bizarre acquisitions, including the state-owned Rover car group.
The Professor's nemesis was a disastrous pounds 432m rights issue, but out of those ashes has risen a phoenix. From the low of 113p a share, hit in September 1992, British Aerospace has since been one of the best stocks of the decade, with the shares now trading at above pounds 17. The lesson there is that management does not have to be new to make an impact. Sir Dick Evans, the chief executive who has been the main architect of the recovery, already had 21 years at BAe under his belt when he took over in 1990.
Astute investors continue to seek out other BAe's in the making. Great things were expected at Great Universal Stores after Lord Wolfson, seen as the saviour of the Next store chain, took the chair. Martin Taylor, a former journalist, was expected to revitalise Barclays, while Niall FitzGerald is shaking the tree at Unilever. Meanwhile, Stuart Wallis is again at work at Scholl, the sandals and footcare group. But remember, stock market history is littered with management failures as well as successes.Reuse content