1. Tuesday, October 6th, 2015
    business model advice

    In seeing the title above, you might think that you will be getting advice on how an investment organization can create a better business model.  Given that the conditions are ripe for industry disruption, firms certainly should be considering how they can stay ahead of the coming changes.Wiley | If you are looking for an easy framework for a multi-disciplinary group to use when considering the issues, you might start with a book called Business Model Generation.

    But this posting is about something else, namely, the tendency for the investment advice that is given to a client (or, if discretion has been granted, the action that is taken on behalf of a client) to be a function of the business model of the investment provider.

    At one level, that’s obvious.  If a provider does not have access to a particular product, a client who relies solely on that provider for investment assistance will not invest in it.

    More generally, it’s easy to lose sight of how investment advice ... continues

  2. Thursday, September 3rd, 2015
    process under pressure

    The headlines are back.  The volatility is back.  What do you suppose your asset managers are doing right now?

    It’s worth remembering that all organizations are messy and no process works like it’s diagrammed in the pitchbook.  When the pressure is on, stresses and strains can manifest themselves in new ways (or distressingly similar old ways).

    Some things to consider:

    ~ If “a business is only as good as its conversations,”the research puzzle | The phrase, which I use a lot, came from Hugh MacLeod. then the quality of those interactions is especially important during times of flux, when they can change in tone, in content, and in the amount of time spent going in circles.  Communication problems can be exacerbated.

    ~ Personality traits that have been hidden during good times might reappear when the pressure does.  Leaders can get controlling, shut down debate, and marginalize those with differential information, just at the time that their observations and ... continues

  3. Wednesday, August 12th, 2015
    guerrilla girls

    As a consultant and writer, I deal with themes and ideas day in and day out.  I collect bits and pieces of related information in electronic and paper files that carry titles which summarize the concepts for me.  Many never result in a published piece and some take years before they do.

    One of the longest outstanding topics for me has been the issue of gender in the investment world — I started on it before this blog was first published more than seven years ago.  That topic has always carried the title, “a seat at the table,” matching one of my earliest test illustrations for the blog, which showed a table of decision makers, each person represented by a ♂, save for one ♀.the research puzzle | I’ve done other sketches like it, including the ones accompanying this posting about decision making when there are power imbalances.

    I stashed notes of my own impressions about the role of women in the business and those of others, as well as studies, articles, ... continues

  4. Tuesday, July 21st, 2015
    behind the curtain

    Last week, Morningstar announced that the DoubleLine Total Return Bond Fund was “not ratable,” repeating its assessment from the previous year.  The battle between the most prominent fund rating firm and Jeffrey Gundlach, the manager of the fund, seems likely to continue for quite some time.

    According to published reports,Financial Times | Including this one, which carried the title of “Morningstar: A force to be reckoned with.” the bad blood began just before the formation of DoubleLine, when Morningstar publicly sided with Gundlach’s previous employer (TCW) after he was fired.  Accounts of the spat usually focus heavily on 2011, when Morningstar only gave the fund a “neutral” rating and did not award Gundlach its “manager of the year” award despite outstanding performance.

    Sometime thereafter the lines of communication between the two were severed by DoubleLine, citing what it felt were errors in analysis by Morningstar.  A ... continues

  5. Wednesday, June 24th, 2015
    the flow of ideas

    How do ideas flow within investment organizations?  That question has fascinated me for years.

    There has been relatively little research done on the topic.  Yet, understanding how ideas migrate at asset managers, advisory firms, institutional investors, research firms, etc. is critical in evaluating their prospects for success.  Having worked with each of those kinds of entities on organizational improvement, I know the importance of the effective communication of ideas — and the difficulty of understanding how it really happens.

    Those trying to make judgments from outside face a tougher task.  What evidence is available to you?  What inferences can you make?

    For an example, see the first draft of a working paper by Gjergji Cici, Stefan Jaspersen, and Alexander Kempf.  It is titled “Speed of Information Diffusion within Fund Families.”SSRN | The version I read was posted in February 2015.  As of this writing, the authors are receiving feedback on it and will be refining it going forward. ... continues