A world without coincidences would be a very strange place indeed. While any one coincidence may surprise or even delight, we should really worry if there were none at all.
26.09.2014 | 14:24 Uhr
In place of my usual Crystal Ball looking at the year ahead, I want to take a longer perspective and think about the lessons we can take from the last 40 years. The period from the end of the 1973/74 bear market, through the Great Financial Crisis to the present day, encompassed not only widely different market conditions but also a period of rapid development in the asset management business. It also happens to span my career in the City. As I reflect on this extraordinary period (or is it?), I do believe there are a number of lasting lessons we should take on board to help guide us through the next 20 years.
Expect the Unexpected
Are you ever surprised by coincidences? Well you shouldn’t be! The same is true of the unexpected. Unforecastable events happen all the time. As an investor we need to recognise that. We should all be quite humble about our ability to predict. I am not just talking about political or geological events such as 9/11 or the Indian Ocean Tsunami that caused so much devastation in 2004. Disruptive technologies, which almost by their name come out of left field and surprise us, can have a huge impact. In the late ‘60s and early ‘70s the concept of the Nifty Fifty was prevalent. These were stable, large cap stocks that you could “depend” on. You could buy them and put them in the drawer and forget about them, or could you? By what hubris did we imagine that we had any idea what the competitive landscape would be like for Kodak and Xerox just a couple of decades later?
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