The Four Most Important Things in Investing

Reading Time: 2 minutes “Investing is the perfect example of a complex problem with no known solution. There are no secrets.” – Nick Magguili (Of Dollars and Data) So what really matters most in the volatile, uncertain and ambiguous environment of investing? Better models? Research? Skilled managers? Access to deals? These things can and do matter, and fortunes have … More The Four Most Important Things in Investing

Underrated Skills

Reading Time: < 1 minute Disagreeing well: it’s easy to disagree badly (and agree badly), and we all know the truism that different viewpoints is good, but harnessing dissenting views in practice is so much harder than you think Managing meetings effectively: many companies would baulk at an expense of several £’000, but routinely allow such sums to be wasted … More Underrated Skills

Summer Reading 2019

Reading Time: 3 minutes Realise I’m a little late with this list this year, but here’s what I’ve enjoyed most so far this year … you’ll see I’m showing my normal bias toward non-fiction, and in fact haven’t included any fiction in this list (although I have read some). Enjoy, and let me know what you think Bad Blood … More Summer Reading 2019

How Many Pizzas

Reading Time: < 1 minute How many pizzas would it take to feed your investment committee? Optimal committee/team size is a great question: NEPC’s survey finds most investment committees are 7+ people, but would prefer to be 4-6. Team behavioral expert Harvard Professor Richard Hackman said optimal is 6, definitely not more than 9. Authors Sunstein & Hastie note the … More How Many Pizzas

Better Behaviour by Design

Reading Time: 8 minutes The evidence is undeniable. We all have brains that are set-up to make consistently bad choices when it comes to domains that are complex, ambiguous and unpredictable – like investing. We overestimate our own ability, screen out information that conflicts with our pre-conceived views, we fear losses, and anchor to what feels well known and … More Better Behaviour by Design

RPI surprises

Reading Time: < 1 minute Quite big news out last week on the future of RPI, in DB pensions-land, amid everything else that’s going on. I’ve seen a variety of conflicting takes on the announcement, but clearly has implications for DB schemes. Here is a helpful reminder of some of the recent background context on the long-running issues with RPI. … More RPI surprises

Why Complexity Sells

Reading Time: < 1 minute A fantastic piece by the great Morgan Housel. Four reasons why complexity sells – Working through complexity feels like real work, while simplicity feels like an easy walk (too easy?) Length superficially signals effort and thoughtfulness (flawed thinking that is not challenged often enough) Things you don’t understand create a mystique around people who do … More Why Complexity Sells

How many managers does it take to …. ?

Reading Time: < 1 minute The answer, according to Mercer ‘s Asset Allocation Survey is 6-8 ish if you are an institution below 1bn, and 13+ above 1bn. I’d say that’s consistent with my experience too in that 1bn tends to create a breakpoint where governance resources step up to cater for portfolios with more managers. But even with 6-8 active (plus … More How many managers does it take to …. ?

All Models are Wrong but Some are Useful

Reading Time: 2 minutes Body-Mass Index (BMI) can be helpful in giving an indication of whether someone is overweight, at risk of developing negative health effects and can give a clear call-to-action to make changes from a dietary or exercise perspective. However, take BMI to extremes and you end up concluding that the Rock, and at least half of … More All Models are Wrong but Some are Useful

Technical Debt

Reading Time: < 1 minute There is an important concept in software development called Technical Debt. Technical debt is incurred whenever a quick fix is implemented that solves a problem but not in the most long-term optimal way form the perspective of the whole system. When you are building something fast, trying to get it working and ship it out, … More Technical Debt