For one whole week this summer, not a single member of The Value Perspective was to be found in the office.
To some, that might seem quite a confession so, to be very clear, great care was taken to ensure no portfolios were left unattended and we could always be contacted by those who needed to do so.
Nor, just in case you were wondering, did we head off on holiday together – we are a close team but not that close.
What we actually did was to hold our inaugural Reading Week – all heading to our respective homes to read books.
Why? That is a reasonable question and we trust you will find our answer equally so.
Regular visitors to The Value Perspective will be aware we firmly believe in the benefits of investing for the long run and yet the nature of investment is such that it is all too easy to become caught up in short-term thinking.
When you are constantly being fed news and other information about any subject, the time available for thinking deeply about that same subject can become very limited – a tricky problem that, since we are talking about books, Cal Newport considers in some detail in Deep Work: Rules for Focused Success in a Distracted World (2016).
As you might expect, everybody elected to read up on very different subjects – you may recently have seen some of their critiques on The Value Perspective and other seem likely to follow in the coming months.
For my part, and for very different reasons, I picked Ray Dalio’s Principles (2017) and A History Of The UK Stock Market from 1945 to 2009 (2010) by George D Blakey.
My reason for choosing the latter was to gain extra perspective.
I have been managing money now for 18 years, which offers some decent context for what I do for a living – but clearly 65 years of context is better still.
As an investor, you quickly lose count of the times people tell you this event is unprecedented or that episode is particularly extreme.
This is basic behavioural finance and the so-called ‘availability heuristic’, also known as ‘recency bias’, which encapsulates the idea that humans tend to ascribe greater significance to more recent events – for example, a driver immediately slowing down after being surprised by a speed camera only to accelerate a few miles further down the road.
Blakey’s book serves an excellent antidote, reminding us that, if you consider all that has happened in the UK since the end of the Second World War, today’s political machinations and economic swings – while undeniably feeling momentous – are in reality nothing out of the ordinary.
To pick one example, things got so bad in the mid-1970s, many people genuinely feared the UK was facing the threat of a military coup.
My motivation for reading Principles also stemmed from a desire to ward off a behavioural finance sin – this time, confirmation bias.
When picking books to read, we are naturally drawn towards subjects we know and like and, almost by extension, to thinking that tends to chime with our world view – but, from the little I knew about Ray Dalio, this seemed unlikely to be the case.
According to Bloomberg, Dalio is one of the world’s 100 wealthiest people, having founded hedge fund manager Bridgewater Associates in 1975.
Among other things, Dalio is know for management techniques, such as ‘radical transparency’ and ‘tough love honesty’, leading to stories of his employees rating each other with iPads in meetings with public scores, “like a reality television show”.
Frankly, some of that has always sounded a little odd to me but, then again, I did not have a very deep knowledge of this undeniably successful investor – which is why a colleague challenged me to read his book.
And when I did, I learned Dalio likes investors who can be open with each other, are unafraid to take unpopular views and are willing to analyse potential investments in great detail.
All of which, of course, are qualities we also rate very highly on The Value Perspective.
To be honest, I remain unpersuaded by parts of his thinking but some of the concepts in Principles are hugely revealing – and what is the point of having a reading week if it does not introduce you to new ideas, challenge your preconceptions and ultimately take you not just out of your offices but also your comfort zone?