skill, technology · 2017. 5. 18. · essentia analytics | 16 excellence is achieved by maximizing...
TRANSCRIPT
Clare Flynn LevyFounder & CEO
Essentia Analytics
Twitter: @cflynnlevy
Skill, Technology & Survival of the FittestESSENTIA-ANALYTICS.COM
@ESSENTIA_SBI
Active managementis now
Survival of the Fittest.
Essentia Analytics | 2
It’s still all about human decision-making.
Essentia Analytics | 3
Today, artificial intelligence is solvingsmall world problems.
Investment decision-making is a large world problem.
Essentia Analytics | 4
O = L + SOutcome = Luck + Skill
(Performance)
Essentia Analytics | 5
Focus on skill, not performance.
Focus on skill, not performance.
O = L + SOutcome = Luck + Skill
(Performance)
S = CD + UDSkill = Conscious Decisions + Unconscious Decisions
Process. Discipline. Self-Awareness.
Essentia Analytics | 6
O = L + SOutcome = Luck + Skill
(Performance)
S = CD + UDSkill = Conscious Decisions + Unconscious Decisions
In the long term, the investor with the most skill wins.
Essentia Analytics | 7
Focus on skill, not performance.
We’re hardwired to herd and react.
8
The World’s Best Traders Do It
Essentia Analytics | 9
$700M L/S EQUITY MANAGER
Essentia Analytics | 10
We’re hardwired to avoid loss.
Essentia Analytics | 11
$12bn EQUITY MANAGER
The Vast Majority of Investors Do It
$12bn GLOBAL EQUITY MANAGER
Spot the Difference
Essentia Analytics | 12
Source: Ericsson, K. A. (2009). Discovering deliberate practice activities that overcome plateaus and limits on improvement of performance. International
Symposium on Performance Science, p.12.
Purposeful Practice
Essentia Analytics | 13
Source: Ericsson, K. A. (2009). Discovering deliberate practice activities that overcome plateaus and limits on improvement of performance. International
Symposium on Performance Science, p.12.
Purposeful Practice
Essentia Analytics | 13
Fund Management
Yesterday
Source: Ericsson, K. A. (2009). Discovering deliberate practice activities that overcome plateaus and limits on improvement of performance. International
Symposium on Performance Science, p.12.
Purposeful Practice
Essentia Analytics | 13
Fund Management
Yesterday
Fund Management Today & Tomorrow
Process. Discipline. Self-Awareness.
Skill = Conscious + Unconscious Decisions Decisions
Essentia Analytics | 16
Excellence Is Achieved By Maximizing Skill
Are You Already Using a Data-Driven Feedback Loop?
17
Play to Your Strengths
Essentia Analytics | 18
$700M L/S EQUITY MANAGER
CONFIDENTIAL | 19
$12bn EQUITY MANAGER
Minimize Your Weaknesses
$12bn GLOBAL EQUITY MANAGER
CONFIDENTIAL | 20
$12bn EQUITY MANAGER
Minimize Your Weaknesses
$12bn GLOBAL EQUITY MANAGER
Who it’s for: PMs who are exiting losers late
What it does: Improves exit discipline;
Mitigates loss aversion
CONFIDENTIAL | 6
One Small Nudge…
CONFIDENTIAL | 22
Exiting1 month earlier = +0.14% p.a.
$12bn EQUITY MANAGER
… Can Make a Significant Difference to Alpha
$12bn GLOBAL EQUITY MANAGER
CONFIDENTIAL | 23
“I believe that the biggest problem that humanity
faces is an ego sensitivity to finding out whether one is
right or wrong and identifying what one’s
strengths and weaknesses are.”
Ray Dalio
Technology is the problem,and the solution.
24
CONFIDENTIAL | 25
“It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”
Charles Darwin
CONFIDENTIAL | 26
Free white papers & case studies at:
www.essentia-analytics.com
Twitter: @essentia_sbi
Get in touch:Clare Flynn Levy