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.
The Active Equity Renaissance: Understanding the Cult of Emotion
“I know you are afraid and you should be afraid. I will invest you in products that will not stir up your fears.” This sentiment is applied over and over again in the investment industry in one form or another. It is the mantra of what my co-author Jason Voss, CFA, and I call the “Cult of Emotion.” The Cult is so pervasive, investment professionals are hardly aware how it affects virtually every investment decision we make. It has been institutionalized through regulation, platforms, gatekeepers, advisers, analysts, consultants, and...
read moreThe Active Equity Renaissance: Rejecting a Broken 1970s Model
The average active equity mutual fund underperforms its benchmark. This statement sparks little controversy and can be applied to active equity hedge funds as well. The story gets worse when the results are AUM-weighted. Collectively, active equity delivers no value to its investors and, in fact, extracts value from them. In our highly competitive markets, what industry can survive if it fails to deliver value to its customers? The consequences of these competitive forces are clear as money flows out of active and into passive equity funds....
read moreMeditation Tips for Investment Professionals: Open-Monitoring Meditation
Meditation provides investors with many benefits. Below are meditation tips from the newly released Meditation Guide for Investment Professionals, the full version of which is available online for CFA Institute members. The initial installment of this series offered general tips to help with almost any meditation practice. The focus in this edition is open-monitoring meditation. Why? Because the world has gone mindfulness crazy in the last several years, and mindfulness is a common term for open-monitoring meditation. Open monitoring has a...
read moreWhere Markets Fail: Markets Assume a Context
In the premiere edition of the Where Markets Fail series, I pointed out that markets are imperfect discounting mechanisms. In this installment, I demonstrate that markets assume a context entirely out of view of their participants, which can have deleterious effects for both suppliers and demanders. Let me lead with an example: In 1994 there was a price for camera film as well as a price for developing that film into photographs. These markets functioned exceptionally well and many companies made money producing film, especially Kodak and...
read moreMeditation Tips for Investment Professionals: How to Begin
Meditation provides investors with many benefits. Below are meditation tips from the newly released Meditation Guide for Investment Professionals, the full version of which is available online for CFA Institute members. Why Meditation Is Important to Investors Meditation is a mind practice that helps develop two skills that are critical for investors: Metacognition: The awareness of awareness itself. Top-Down Control: Choosing what to think and when to think it. Why do we need these skills? Because as investors we must see the world for what...
read more18 December 2016 – Globe and Mail: How meditation can make you a better investor
Jason A. Voss, CFA delivered a speech about the benefits of meditation for investors to a sold out audience at CFA Society Toronto. The event is captured here by the Globe and Mail.
read moreWhere Markets Fail: An Imperfect Discounting Mechanism
I am an avid fan of capitalism as well as a critic. While I agree that markets are generally better at discounting the future than individuals, there are inherent flaws in the markets that are difficult, if not impossible, to overcome. I point out these weaknesses because, just like with any mental model and organizing principle, knowing the weaknesses is the first step in avoiding or discounting them. Imperfect Discounting Mechanisms Many capitalists believe the markets are sacrosanct and, in their blind devotion, prove why...
read moreA Behavioral Bias Cure?
My behavioral finance passion extends not just to categorizing new biases, which is rather humdrum, but in searching for and documenting actual tools to overcome them. Enter a globally recognized neuroscientist, Ulrich Kirk of the University of Southern Denmark. With his fellow researchers, Kirk has tested people’s ability to master behavioral biases and has found something remarkable: Meditation is a way to conquer biases. Curious about meditation? After almost four years of diligent research, authoring, and the building of a learning...
read moreRelationship Strain: The Sins of the Active Manager
Earlier this week we asked CFA Institute Financial NewsBrief readers: “What is the biggest sin for an active manager relative to its relationship to an investment consultant?” and 652 of you responded. Our goal is to bring clarity to a frequently strained relationship — that between investment consultants and active investment managers. Investment Consultant Needs On one side, you have investment consultants representing their clients’ fiduciary interests. These include a variety of outcomes, mainly appreciation of capital, but also capital...
read moreIt’s Time for Principles of Non-Violent Communication
In this moment of global rancor, Marshall Rosenberg’s Principles of Non-Violent Communication are one possible navigational compass toward increased unity.
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