The contrarian investor's approach to attending music festivals
We have always known a disciplined and objective approach to decision-making works for investors in the long run but apparently it can also help solve some of the shorter-term challenges faced by festival-goers
The UK music festival scene may not be the most natural of habitats for The Value Perspective team but we are now seriously considering giving it a go.
What has served to change our mind about the prospect is this great article on the Newsbeat section of the BBC website and, while the festival season may be all but over for this year, it turns out the extra preparation time ahead of next summer might be all to the good.
The article describes how a group of eight friends decided to adopt a contrarian approach to festival-going.
Instead of taking the more traditional instinct-based path, they sought to improve their chances of having a good time by relying on statistics to meet the perennial festival challenges of agreeing which bands to watch, making friends, settling on when to eat and avoiding arguments.
To be fair, this approach did not always better the average festival-goer’s preference of basically leaving everything to chance but apparently it did pay dividends when deciding which bands they should see.
Beating 'squeaky wheel' syndrome
Here festival tradition holds those with the strongest personality – or, later in the day, simple alcohol levels – dictate choice but our contrarian octet concluded ‘k-means cluster analysis’ was the answer.
To quote Newsbeat, this is “a way of taking absolutely loads of data and putting it into smaller groups or clusters. In the real world, the technique is usually used in marketing to target people with adverts based on what other, similar people are into”.
In this instance, it involved listening to all 116 bands on the festival line-up ahead of time, rating them out of 10 and using the resulting data to find pairs to watch bands together.
And it appears to have worked.
“All eight of us agreed we had fewer arguments than usual about who to watch,” notes the author of the article – which is good news because he also ventures a conservative estimate that each member of the group would have spent some 45 hours listening to all the different bands ahead of the festival.
‘Now That’s What I Call Research’, as it were …
Here on The Value Perspective, we bow to no-one in our respect for this sort of approach to making choices.
After all, as we have explained in articles such as Big tick and Investment edges, adopting a disciplined and repeatable process to decision-making that forces us to be objective while cutting out emotion and extraneous ‘noise’ is precisely what we do every day when picking investments.
Now, is Glastonbury back on next year?
Investment Specialist, Equity Value
Ben joined Schroders in 2016 after spending 3 years as an analyst at the Royal Bank of Scotland. He moved in to the Value team in January 2018 as an investment specialist after working for two years in Schroders' Distribution division. He is a CFA Charterholder and holds an MSc in Corporate Strategy from The University of Nottingham.
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