As he has before, Barry Ritholtz has posted an excellent piece this morning describing a variety of things he is thinking about. It reminds me of the following classic commercial.
As demonstrated by the poor German Coast Guard official in the commercial, if we are going to get anything worthwhile out of each other’s thinking, we need to be speaking the same language — both literally and figuratively. But that happens all too infrequently in our business. Indeed, we can’t often agree on even the foundations of our would-be discussions.
We are driven by our ideologies and our behavioral biases rather than facts and data. Even worse, we refuse to acknowledge (much less accept) facts and data that militate against our preconceived notions. We even suck at math and at analyzing probabilities, often causing our analytical efforts to be suspect or just plain wrong. Our investment processes — the key to investment success — are generally poor.
The bad news from all this is that clients are poorly served far too often. The good news, of course, is that it means that there is plenty of opportunity for those who would do things right.
Barry offers a great list of things all of us in the investing world ought to be thinking (“sinking”) about. Here’s hoping that we can exercise the good judgment to interpret the list along with the facts and data that support it both fairly and well.