I strive to be smart, wise, analytical, creative, intuitive, and informative. I hope to help make you a better active investment management pro.
I recommend you start with the Best of the Blog.
Real Risk Management: Subjectivity vs. Objectivity
In this series on real risk management I have covered the importance of both contexts and preferences with regard to investment risk. First, I argued that quantitative data must match qualitatively chosen contexts. Next, I argued that those qualitatively chosen contexts are driven by our preferences, and that risk only exists due to our preferences. However, lurking in the shadows throughout these two articles is a tension between subjectivity and objectivity. Said more directly, is there such a thing as absolute risk that is true for every...
read moreThe Sarasota Institute’s first white paper published!
Many of you who follow me and my work know that I am the co-founder of The Sarasota Institute, a 21st Century Thinktank. I am proud to announce the publication of our first whitepaper, The Big Issues. It provides insightful & concise commentary on tech, climate change, economics, democracy, and other crucial subjects to understand for the 21st century. I highly encourage you to download a free copy of The Big Issues.
read moreReal Risk Management: Preferences
Several weeks back I described how critical is context in risk management. I did this to bust out of the narrow confines of how financiers think about risk. As I pointed out risk in finance is most frequently thought of numerically and constrained by concepts of volatility, covariance, and value-at-risk (VAR). Having broken free of the quantity tether, I now want to briefly describe how preferences create risk. Preferences → Risk Let me put it directly: Our preferences create risk. Examples should help to make this clear. Imagine the...
read moreReal Risk Management: Contexts
This is the first in a multi-part series on what I call real risk management. Specifically, I want to point out the tremendous importance of context in getting risk management correctly done. But first, I have to announce that my view of risk management stands in stark contrast to how most investment professionals tend to think of risk management: volatility, covariance, value-at-risk, et al. One of my favorite analogies helps to understand why I do not like the preceding methods. Namely, the old Chinese saying of: A wise person points a...
read moreTime to End the Alphabet Soup Sustainability Community
Quick, tell me the name of the investment philosophy that factors in externalities – such as air and water pollution, or social policy – into its securities’ assessments. What’s your answer? Did you say: Corporate Social Responsibility (CSR)? Socially Responsible Investment (SRI)? Impact Investing (II)? Environmental, Social, and Governance (ESG) investing? Chances are, you named one of the above, didn’t you? If you look at the preceding list we have an alphabet soup of possibilities: CSR, SRI, II, and ESG. Importantly, are there meaningful...
read more2 November 2018: Barron’s – How to Take Fear Out of Your Investing Decisions
Me, featured in Barron’s discussing ways that investors can cope with the stresses of a falling market. The piece is entitled, “How to Take Fear Out of Your Investing Decisions.” Note: you will need a subscription in order to read the full piece.
read more2 November 2018: Bloomberg Opinion – The Future of Active Management? It’s Vinyl
Me, featured today on Bloomberg Opinion – The Future of Active Management? It’s Vinyl, interviewed by Mark Gilbert. Thanks to Essentia Analytics, who hosted me for the original piece that inspired the interview: Active Management Does Have a Future – And Here’s What it Looks Like. In short, I lay out the case for my belief that active investment management going forward looks very, very different than it does today.
read moreThe Dark Side of Asset Allocation, Part 4
So far in this series I have shared three ways in which asset allocation as typically executed by investment professionals can lead to undesirable outcomes. In Part 1, I shared that asset allocation frequently leads to too much risk being taken on by investors, as well as deworsification. While in Part 2, I pointed out treating frontier and emerging markets as an asset class can starve frontier and emerging markets of much needed capital, thus impoverishing them. Most recently, in Part 3 I pointed out that asset allocation strategies are...
read more30 October 2018: Will Technology Dominate Finance? A MicGoat debinar.
On 30 October 2018 at 9am EDT I will be hosting the following debinar. PLEASE JOIN US! Here is what you need to do to participate: Download the MicGoat app for your iPhone or iPad. Register for the debinar (debate webinar). Log in to the app on 30 October 2018. Listen, then respond, all the while learning and having fun! Hope to see you there and then 🙂 Jason
read moreThe Dark Side of Asset Allocation, Part 3
This is my most recent article in a series that evaluates the dark side of asset allocation. In Part I, I discussed the unsavory fact that asset allocation frequently leads to important unintended consequences. This theme was extended to Part II as well, where I pointed out that treating frontier and emerging markets as an asset class can starve frontier and emerging markets of much needed capital, thus impoverishing them. In this article I discuss more of the dark side of asset allocation. Namely, that these strategies themselves rarely...
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