MONEY
LEARNING
LIVE
&LEARN
You can learn a lot from
fund managers – and
not just about investing,
writes Anthony Luzio
under-researched investments, going to
the quieter restaurants a little further
off the tourist track and in need of more
custom is often a much better option.”
I
t goes without saying that one of the best ways to educate
yourself about investing is to pay attention to what fund
managers say. Considering they spend their lives scouring
balance sheets, visiting companies and analysing macroeconomic data, their views are always worth listening to
– even if they often contradict those of their peers.
However, investing is not the only thing you can
learn about from fund managers. Below, a selection
of professionals reveal how what they have learnt from
their careers managing money has helped them in their
life outside of work – and a few have even passed these
nuggets of wisdom on to their own children.
MONEY DOESN’T COME FOR FREE
David Coombs, head of multi-asset investments at
Rathbones
“OVER THE COURSE OF MY 30-YEAR CAREER,
some of which was spent at Barings at the time of the
bank’s collapse, I’ve become very attuned to the risks
associated with leverage, debt and over-extending
oneself. For this reason, none of my three eldest children,
who are in all their 20s, own a credit card.”
“The problem is that in today’s society, it’s all about
immediacy, not prudence – wanting things now and
paying for them later is something that is voraciously
encouraged. I wanted my children to learn to wait.
I’ve tried to teach them to think ahead when it comes
to money – to be patient and sacrifice the ‘now’ for
greater rewards in the long term.”
“When my kids were younger, they would receive
pocket money and then a top-up if they had earned it
(by doing household chores, for example). The main
thing was that they knew nothing could be taken for
granted, there was no bailout. To this day I make sure
they understand the value of money and that every
decision has its consequences later down the line.”
8
ADMIT TO YOUR MISTAKES
– AND LEARN FROM THEM
DON’T MISTAKE POPULARITY FOR QUALITY
Nick Samouilhan, manager of Aviva’s Global Cautious
Income and Balanced Income funds
“MY ONE LESSON IS THE ONE THAT I OFTEN
REMEMBER to use when on holiday. In markets,
the investments that are well-researched and in the
spotlight or news flow are often the poorest investments,
as much of the outlook is already priced in. The trick to
finding good investments is to hunt in the areas outside
of the spotlight, where undiscovered gems are often to
be found. The same is true when choosing restaurants
while on holiday. Like many people, our tendency when
you don’t know the area is to go to the busiest one, using
the restaurant’s popularity as a measure of how good it
is. In our minds, if it is terrible it won’t be busy.”
“However, a lesson to take from investing is that
being popular is not the same thing as being the
best. While the food at the busier restaurant may be
good, where it is located may be a far more important
factor in ensuring it is busy than the quality of the
food. This is often the case when a restaurant is on a
busy tourist track, with this visibility to uninformed
tourists driving business. However, just like with
trustnetdirect.com
Euan McNeil, manager of Kames’ Ethical
Corporate Bond and Investment Grade Global
Bond funds
“THE MAIN ADVICE I WOULD GIVE MY KIDS would
be to have faith in your own judgement, be singleminded and don’t be swayed by what the crowd is
saying or doing. However, equally as important is that
when you do make a mistake, concede to your error of
judgement and learn from it.”
“There is no specific event that has shaped my view
on the dangers of group-think – in our industry, there
are often scenarios where it pays to be the contrarian,
in spite of the obvious comfort of adopting what
can be a mainstream and consensual view. Being
underweight fixed income as an asset class has
certainly been one such strategy in recent history that
has not proved to be particularly successful.”
“The ability to demonstrate humility when you
have made the wrong decision is not a skillset specific
to the world of fund management – learning from
your mistakes is something that would serve most
careers well.”
James Sullivan, founding partner of Coram Asset
Management
“IT IS OUR DECISIONS IN LIFE THAT SHAPE US
AND OUR CAREERS – and often inadvertently those
around us. It would appear that today we live in a
cavalier culture of ‘no regrets’ whereby accepting a
regret or a mistake is deemed to be a sign of weakness,
incompetence or insecurity. There is no shame in
reflection and revaluation of one’s decisions – whether
professional or otherwise – in an attempt to better
oneself going forward.”
TAKE THE EMOTION
OUT OF DECISION-MAKING
when your fight-or-flight instincts are telling you to
respond to a situation with powerful forces such as
fear or greed.”
“In investing, and in life, it’s vital to take a step back
to try to look at the facts of a situation and respond
logically rather than on a short-lived emotional
pull. As long as you have made a decision based
on a careful, logical assessment, patience should
eventually pay off.”
Gervais Williams, manager of the Miton UK Multi Cap
Income fund
“EMOTION AND RATIONAL JUDGEMENT CAN
DIVERGE, especially when that involves challenging
the consensus. It’s harder to hold the longer term course
when performance isn’t so good. The lesson I have learnt
over the years is that it generally pays to be resilient.
Fu