1. Wednesday, August 29th, 2018
    quant questions

    Quantitative investment management has been around for quite a long time.  Three decades ago, changes were often made at a monthly frequency, based upon attributes identified by leading academics and developed into strategies by new units set up at Wall Street firms.

    Today, according to Bank of America Merrill Lynch, “A seismic shift in assets and resources toward data-driven, systematic strategies and shorter-term investment strategies, which tend to rely on access to better, faster and larger stores of data is underway.”  The quant rush is definitely on.

    There are a host of questions for investors to consider, some of which are outlined below.  Most of them have been covered in extensive depth elsewhere; this, then, is not meant to be a comprehensive list of questions or a detailed analysis of any of them.  Instead, it represents what seem to be some open questions of importance, based upon where we are right now and how quantitative investing has been embraced in ... continues

  2. Tuesday, July 24th, 2018
    through the glass door

    When investigating and analyzing investment organizations, one of the hardest things to assess is “culture.”  In the workshops that I lead on due diligence and manager selection (here’s the next one:tjb research | Make sure to look at the rest of the site for related resources and services for allocators and asset managers.), we spend a fair amount of time on culture, how to analyze it, what makes for a “good” culture, etc.

    I start not with definitions from the investment world, but with general principles about culture from those who study it.  As I like to say, “Investment people are people and investment organizations are organizations.”  Certainly there are aspects of those organizations that are different from ones in other fields, but when you bring people together in groups, the same kinds of issues and behaviors appear over and over.  A grounding in the basic concepts helps in the assessment of the sustainability of an ... continues

  3. Thursday, June 14th, 2018
    slings and arrows

    I think it’s fair to assert, as a New York Times article did, that “the American business world now fetishizes failure.”New York Times | The article is about colleges helping students experience failure.  Books, articles, podcasts, etc. extol the virtues of failure, citing the personal and business stumbles of those who went on to attain wild success — and encourage us to be willing to fail and fail again in pursuit of our dreams.

    “If you think that’s a big failure,” Jeff Bezos said of one of Amazon’s stumbles, “We’re working on much bigger failures right now.”Money | The article includes failure episodes from nine other “highly successful people” too.  That philosophy is in ascendance at organizations large and small, although there’s no doubt that having a motivational poster on the wall is a lot easier than living a mantra day to day.  There are exceptions,New York Times | The team members of Project Foghorn got a bonus despite their flop. ... continues

  4. Monday, May 14th, 2018
    compounding knowledge

    Some thirty-five years ago, I wrote a project report for an entrepreneurship class, dealing with the proposed creation (by me) of Idea Consultants, Inc.  Its purpose was “to provide organizations with advice on dealing with ideas and issues,” within the conceptual framework of “idea management.”

    The concept of idea management is still out there, but it’s much more common to hear about the broader notion of “knowledge management” (which yields fifty times more Google search results).  And, while knowledge management isn’t a hot topic among investment organizations, it should be.  Thus this posting.

    The best place to start investigating the concepts is a paperSSRN | “Knowledge Management in Asset Management” is the somewhat redundant title, although appropriately so. from Eduard van Gelderen and Ashby Monk.  They argued that “a skillful asset manager maintains and creates superior knowledge and knows how to apply that ... continues

  5. Saturday, March 3rd, 2018
    the culture factor

    The cover of the January-February 2018 issue of Harvard Business Review announces the theme of five pieces within it, “The Culture Factor.”Harvard Business Review | The authors are Boris Groysberg, Jeremiah Lee, Jesse Price, and J. Yo-Jud Cheng.

    As befits HBR, the content is aimed at the leaders of organizations, to aid them in analyzing and shaping culture.  So, those of you in charge at asset management organizations or investment advisory firms or institutional asset owners can apply the information to your domains.  Where would you plot your culture within this simple framework?Spencer Stuart | Two of the authors are from Spencer Stuart, which developed the concept.


    Is your assessment an accurate reflection of where the culture is today or is it more aspirational in nature?  Is the particular placement on the axes of flexibility versus stability and independence versus interdependence conducive to attaining your goals?

    For this posting, however, I want to switch ... continues