If you think low rates and high debt levels can last forever, think again<\/a><\/li>\n<\/ul>\nWell, maybe some have lost their mojo, but for the most part, the answer is no. There\u2019s valuable information and insights to be found in the shadows of obscurity.<\/p>\n
Now, before you accuse me of being a raging contrarian, may I remind you that the top money managers in the world underperform 3-5 out of every 10 years, including the best of them all, Warren Buffett. Their most compelling observations often come when they\u2019re in the doghouse because, by definition, they\u2019re non-consensus. And their portfolios represent the best value when nobody is watching.<\/p>\n
Input Diversification<\/strong><\/p>\nIn this world of customized news feeds and polarized media, it\u2019s easy to read only things that support your view. But that makes no sense. You want to diversify your reading just like you diversify your portfolio. Not everyone you follow should be on a roll, just as not everything in your portfolio should be performing.<\/p>\n
Keep in mind, you don\u2019t have to agree with the conclusions. What you\u2019re trying to do is mine their work for nuggets that will inform your own view.<\/p>\n
Conditional Love<\/strong><\/p>\nI\u2019m not suggesting you blindly seek out everyone who is out of favour (although it may not be a bad strategy). I won\u2019t stick with someone just because they were good once. My contrarianism has conditions.<\/p>\n
The forgotten must be doing the same thing they were when they were successful. For example, I\u2019m not interested in a rock star stock picker who is now a strategist.<\/p>\n
It\u2019s important that they\u2019re sticking to a tried and true philosophy, no capitulating and moving to the centre.<\/p>\n
And importantly, I\u2019m looking for people who are saying things I\u2019m not hearing elsewhere.<\/p>\n
Searching for non-consensus <\/strong><\/p>\nI see a lot of managers over the course of a year and sometimes distinctive trends emerge. Last year, growth-oriented managers were riding high, which means they sounded smarter and their investment process oozed logic. Conversely, managers on the other end of the spectrum, often referred to as value managers, had a very different body language. They were on their heels. Their winners sounded less compelling and their losers, well, they looked like unforced errors.<\/p>\n
I\u2019m aware of this potential bias and am careful not to ascribe too much brilliance to the former category and too little to the latter. So in addition to following the managers who owned the high-flying technology and consumer brand companies, I kept in touch with what the value managers were doing, including Francis Chou, Seth Klarman (Baupost Group), Mason Hawkins and his team (Longleaf Funds), and Jeremy Grantham and James Montier at GMO.<\/p>\n
Other fertile territory for non-consensus views are the newsletters of outspoken fund managers. Bill Gross, the (former) king of bonds, and John Theissen, who runs the Vertex Fund, never hold back, which makes for interesting reading and tense discussions with the marketing department. And of course, short sellers are the ones with the most radically different views. It\u2019s no fun hearing them colorfully eviscerate one of our holdings, or question a theme we\u2019re pursuing, but it\u2019s a good gut check.<\/p>\n
It\u2019s important that you diversify your information sources. You\u2019ll have to work harder at it and go where you don\u2019t normally tread, but it\u2019ll be worth it.<\/p>\n
Tom Bradley is President of Steadyhand Investment Funds, a company that offers individual investors low-fee investment funds and clear-cut advice. He can be reached at <\/em>tbradley@steadyhand.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Tom Bradley: It’s important that you diversify your information sources as you would diversify your portfolio<\/p>\n","protected":false},"author":578,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/6370"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/578"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=6370"}],"version-history":[{"count":1,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/6370\/revisions"}],"predecessor-version":[{"id":6371,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/6370\/revisions\/6371"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=6370"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=6370"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=6370"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}