I am back in Tuscany and will head to Milan tomorrow early, give a speech at the Bloomberg offices and then back home. But it is Monday and that means it is time for another Outside the Box. And I have found a most excellent offering. Dylan Grice from Societe Generale in London wrote on value for an OTB a few weeks ago, and he follows that up with more thoughts on the use of macro trends versus value investing. This is a real think piece, and worthy of more than one read.
I have to hit the send button, as my last dinner in Italy awaits (and real Italian food has been a revelation, and the wines! I am something of a chardonnay snob, and usually turn my nose up at Italian and French whites, but I found some local Tuscan chardonnays that were up to the best in California. And at reasonable costs.).
Your not wanting to leave Tuscany analyst,
What can baseball, wine pricing, medical diagnosis, university admissions and criminal recidivism teach us about the markets? My good friend James Montier thinks there is a lesson to be learned and explains it in his Global Equity Strategy newsletter.
James is the Director of Global Strategy at Dresdner Kleinwort Watterstein, a London and Frankfurt based investment bank. He is also a prolific writer and author of the book Behavioral Finance - Insights into Irrational Minds and Markets.
In his article "Painting by Numbers: An Ode to Quant," James discusses the role of statistics and the value that it provides. He further discusses the psychological implications that investors face as a result of quantitative versus qualitative decision making. While this is not something our egos will like to read, I do believe that you will truly find this to be a thought-provoking piece.