SOMETHING FOR THE WEEKEND
OK, we’ll be far outnumbered by our North American colleagues, but there will be a small British contingent at the Evidence-Based Investing Conference in New York City on November 15th. Among them is Clare Flynn Levy, whose firm Essentia Analytics uses machine learning technology to help professional investors to identify behavioural patterns which are likely to have a detrimental on their returns.
Behavioural finance is a fascinating subject. Understanding the intricately complex connection between behaviour and returns and, crucially, applying the lessons learned, are in my view a very important part of the evidence-based approach to investing. In this interview, Clare explains how technology can help all investors — professional and otherwise — to achieve better outcomes. behavioural
A personal note
I wasn’t going to say anything, but it’s finally caught up with me these past couple of days. My elderly father had a severe stroke a few weeks ago. We nearly lost him last week, and although he’s out of immediate danger, the whole situation is taking up much of my time and energy.
Please bear with me, then, if I post rather less frequently for a little while and if it takes me a little longer to reply to emails and phone messages than normal.
In the meantime, thank you to everyone for your kind wishes. And for those asking, yes, I still plan to come to the Evidence-Based Investing Conference in New York. Drop me a line at robin@evidenceinvestor.com if you’d like to meet up. Hi behavioural.
Investing Demystified (Video 2/5)
Here’s the second video in our series Investing Demystified, featuring Lars Kroijer, which provides a basic introduction to index investing.
Lars is a former hedge fund manager who has seen at first hand how very hard it is, to beat the markets, even for professionals with vast resources at there disposal.
In this video, he urges investors to ask themselves whether they honestly think they have an edge over the rest of the market. If you think you know more than the thousands of expert investors out there, go ahead and be an active investor.
But the truth is that the vast majority of investors do not have an edge, and are therefore much better off investing in low-cost funds that simply track the market.
The story behind TEBI
Financial podcasting is yet to take off in the UK in quite the way it has in the US, but there are now some good podcasts out there. Pete Matthew’s Meaningful Money is one, and Martin Bamford’s Informed Choice Radio another. Sup behavioural.
I had the pleasure of being interviewed by Martin for a recent podcast. The interview is 25 minutes long and gives the whole background on how I became involved in the investing industry and my thoughts on why the evidence-based approach makes so much sense.
The show in question is ICR117, and you can either download it from iTunes or listen to it on the Informed Choice website.
The Investment Association — one year forward, ten years back
I distinctly remember the moment I heard that Daniel Godfrey had been ousted as Chief Executive of the Investment Association. I was in the offices of a national newspaper in London. I said to the money editor that at least he had a lead story for Saturday’s money section and was surprised by his response. He said he wouldn’t be touching a story that was of so little interest to the paper’s readers.
True, the name Daniel Godfrey meant nothing to the vast majority of UK investors then, and still doesn’t today. But almost 12 months on from that fateful day — 6th October 2015 — I’m more convinced than I’ve ever been that Godfrey’s removal from office will prove to be a defining moment in the history of UK asset management.
Sorting the wheat from the chaff in financial content
One of the problems a financial writer faces is there’s so much content out there that it’s very hard to sort the wheat from the chaff. That’s why content curators add so much value. For me, there’s no one better at it than Tadas Viskanta, best known for his blog Abnormal Returns. I began this interview by asking Tadas about The Evidence-Based Investing Conference in New York City in November, where he’s going to be chairing a panel.
Also worth reading
Markets were very different 50 years ago (Ben Carlson)
How huge egos undermine “star” fund managers (Howard Gold)
Resist the constant temptation to do something (Joachim Klement)
Can the human brain rationally process market events? (Roger Nusbaum)
Looking for superheroes? Read a comic, not the money pages (Brian Portnoy)
Fear not — passive investing won’t mean the end of capitalism (Robert French)
Active managers are currently offering “the worst of both worlds” (Craig Lazzara)
Lessons on life and investing from the legend that is John C. Bogle (Chris Taylor)
The one thing that Buffett, Munger, Bogle et al. have in common (Michael Batnick)
“The bottom line is this: Get off your duff and start investing now” (Get Rich Slowly)
A surprisingly small proportion of fund managers invest in their own funds (Russ Kinnel)
Does the standard advice to “think long-term” apply to retired people too? (Vanguard)
We often hear passive works less well in “less efficient” markets. But is it true? (Morningstar)
Robin is a journalist and campaigner for positive change in global investing. He runs Regis Media, a niche provider of content marketing for financial advice firms with an evidence-based investment philosophy. He also works as a consultant to other disruptive firms in the investing sector.
