I’m a big fan of Tadas Viskanta’s website, Abnormal Returns. Although he’s e very good writer himself, Tadas is best known for his content curation. Every day he pulls together the best content on a range of different subjects — principally investing, research into asset management, the financial advice profession and start-up businesses.
Tadas also has an occasional week-long series called Blogger Wisdom, in which he asks a group of financial bloggers a different question each day. He ran the latest series last week, and once again I was very honoured to be included on the panel.
Here are the questions that Tadas asked us, together with my own answers and links to the views of the other panelists.
Is value investing dead? Seriously, it’s been quite some time since it had any meaningful outperformance. Or is this just the kind of talk you hear at a turning point?
What I said: I’m not a huge factor enthusiast. Just because something has worked in the past, that doesn’t mean it’ll do so again. That said, it’s not unusual to have to wait for many years for a premium to show up; and when they do, they often present themselves in a very short burst. I would say it’s probably worth hanging in there, but I wouldn’t hold your breath.
Traditional active management is dying a slow, painful death. Is the introduction of non-transparent, active ETFs a potential turning point or simply a finger in the dike of an unstoppable trend?
What I said: History is repeating itself. Whenever there’s a ground-breaking product innovation, the investing industry will produce its own, inferior version and slap a higher price tag on it. It happened with the invention of the mutual fund, then the index fund, and now the ETF. Don’t write off active management, though. Human nature combined with slick PR and marketing will ensure it always has a place.
I am intrigued by the idea of the Long-Term Stock Exchange. Do you think it has the potential to open up the capital markets in new and meaningful ways? Or is the LTSE up against entrenched interests who simply too powerful?
What I said: I’m all for anything that promotes long-term investing. It’s better for investors, for companies and the economy. The problem is, it’s not so good for the investing industry, which makes its money from focussing minds on the here and now, and on yearly, or even quarterly, targets. Until that misalignment of interests is addressed, short-termism will remain the order of the day.
What have you learned in the past year (or so) that genuinely surprised you? Or said another way, what thing have you changed your mind about recently?
What I said: I kept on hearing that investment advice in the UK in the 1980s and early 90s was like the Wild West. It’s only in the last few months that I’ve started to look into it, and the profiteering and plain dishonesty at that time was far, far worse than I had ever imagined. The banks, insurance companies and large advice chains were the biggest culprits. I used to think they would get away with it, and that those affected, who are either near or already in retirement today, would never see justice. I now suspect that rip-off asset management fees are a huge mis-selling scandal in the making.
Hey, how’s your podcast doing? It seems that most bloggers if they don’t already have a podcast, have toyed with the idea. As a blogger how do you view podcasting? Does it supplant blogging, support it, or is it something different altogether?
What I said: I actually have two podcasts — The TEBI Podcast for investors and The Intelligent Adviser for financial advisers. They’re going OK, but I must say I prefer the written word — from a consumer’s point of view as well a producer’s. Almost everyone who’s anyone seems to have a podcast nowadays. I may be wrong, but I suspect we’ll be reaching Peak Podcast pretty soon.
Finally, what has you jazzed? It could be a blog, podcast, movie, book, show, app or gadget, etc. Give us your enthusiastic endorsement(s).
What I said: My wife recently joined me for a short holiday in South Africa after I spoke at a conference in Johannesburg. I worked there as a journalist for a few months after the first all-race elections, and going back, all these years later, was truly exhilarating. It’s a wonderful country, and if you haven’t yet been on safari, book one now. Life’s too short to put off the things you always wanted to do.
Picture: James Lee via Unsplash