#SFTW: The (reversion to the) mean machine

Posted by Robin Powell on October 16, 2015



Sir Francis Galton loved upsetting people. The Church of England didn’t take kindly to his statistical analysis of the power of prayer (he wasn’t a big fan); nor were women too impressed with his beauty map of Britain, which graded them on a scale from attractive to repulsive depending on where they came from.

But the Birmingham-born statistician, scientist and inventor also introduced fingerprint technology, the weather map and, last but not least, the famous “bean machine” which he used to illustrate the concept of reversion to the mean.

Now, five and a half thousand miles away, a financial adviser in California has produced a replica of that machine to demonstrate the nature of investment returns.. And I’ve just been to see it.

For the full article click here


Other TEBI posts you may have missed..

What keeps fund managers awake at night? (it’s not poor performance)

Still in any doubt about the need for unconflicted advice? Read this

Investing automatically is strange at first but you’ll get used to it

Timeless financial advice for babies (and indeed the rest of us)

If your fund manager isn’t on this list, you ought to ask them why


Hedge funds..

Hedge fund performance was last this bad during the financial crisis (Julia La Roche)

Even with perfect hindsight hedge funds still disappoint (Dan McCrum)

30% of new hedge funds don’t make it past 3 years due to poor performance (Larry Swedroe)


Other funds..

“Recommended fund” lists — and why it’s best avoid them (Holly Mackay)

The mathematics of active management are unforgiving (James Twiss)

HSBC the latest major player to slash the cost of passive in the UK (Richard Hubbard)


Investment behavior..

There are no shortcuts to getting in shape — or to investing (James Osborne)

Planning to diversify using commodities? You ought to look at this (John Gabriel)

Apathy as a strategy has much to recommend it (Ben Carlson)


The advice profession/ industry* (*delete as applicable)

Where’s the talent gone? and other challenges for wealth management (Ed McCarthy)

The people who can least afford bad investment advice are the poor (Allison Schrager)


Personal finance..

Get in the habit of regular saving. You’ll never regret it (Elizabeth McBride)

You need to be your own money super-hero (Monevator)


And finally..

In addition to the content on this blog, my company Regis Media produces educational and marketing material for investment advisers who share the evidence-based approach. It ranges from pre-produced series to regular video blogs, articles and infographics.

Although based in the UK, we have an international customer base, with new clients in Germany, Australia and New Zealand about to come on stream. Our content comes in different languages, and no, for advisers in other English-speaking markets, the British accent doesn’t come as standard!

Nor is it all about content. For clients who are too busy to manage their Twitter, LinkedIn, Facebook or YouTube accounts, social media management is part of our service as well.

For more information, please get in touch.



Robin Powell

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.


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