“Work, Work, Work, Work, Work, Work”

Back View of the Thoughtful Businessman wearing a Suit Standing in His Office, Hands in Pockets and Contemplating Next Big Business Deal, Looking out of the Window. Big City Business District Panoramic Window View.

Topic: Pearls of Wisdom

Geoffrey J. Gouinlock CFA

October 30, 2019

Image used with permission: iStock/gorodenkoff


Print & Share

Print

“Work, Work, Work, Work, Work, Work”

This has been a busy year. I’ve had lots happening on the home front (a wedding!) and lots going on at the office (too long to list!) Managing work in such an environment requires rationing one’s time efficiently.

There are companies to follow, clients to call, economic and geopolitical developments to track, and portfolio adjustments to be made. But variety is one of the best things about this job. Heck, there are even blogs to be written! Each of these aspects of the job is important and it’s a little senseless to rank order them. So, I’ve been hopping from one to the other and trying to make the best of a busy time. And I’m not complaining, it is certainly better than the alternative.

However, one activity that does get marginalized in times like these is the time for thoughtful reflection. There is a tendency to allow the tasks of a busy office to eat up your day. But, stepping away from these distractions is a necessary requirement of making informed and thoughtful investment decisions. Reading the business periodicals, interacting with other professionals, and getting out and observing what’s happening in the world can seem of marginal incremental importance. But it is almost always of value to our business and the decisions we make.

I was reminded of this recently upon completing a couple of one day business trips outside Ontario and attending the Grant’s fall conference in New York. There was time in airports and on planes for reading, and there was exposure to points of view and insights a little different from what is available in the echo chamber of Bay Street.

Over the years I’ve mused about going to the Grant’s conference and I think my partners finally got sick of me talking about it and just told me to go. I’m glad I did because Jim Grant does a great job of bringing together some of the brightest minds in finance. This fall the conference included Bill Dudley, former chair of the New York Federal Reserve, and Seth Klarman, a legendary investor sometimes labeled “the Oracle of Boston”, in homage to Warren Buffet, “the Oracle of Omaha”. The conference was a great opportunity to step away from the details of the business and reflect on other important matters necessary for investment success in this crazy world.

On an issue that is close to my heart, Peter Chiappinelli of Boston-based Grantham Mayo Van Otterloo (GMO) spoke insightfully about the current fiduciary challenge investing client funds in the bond market. Currently, many managers have chosen to play along with the trend – bond yields are falling, the duration of the benchmark indices is lengthening, and the credit quality is declining. Although future returns will almost certainly be negative in real terms, many a manager’s allocation to bonds owes more to the composition of the index than to the manager’s forecast. In contrast, if you believe, as GMO does, that bond yields will provide low to negative returns in the years ahead, and that the erosion of credit quality will eventually end badly, a manager who takes fiduciary duty seriously will have a portfolio that looks very different than the popular benchmarks. But that manager is assuming what is best described as “career risk” for running against this trend. That’s the uncomfortable position GMO finds itself in, and we at Nexus know the feeling well.

One key takeaway from the conference was that the speakers were not in agreement on how the world will unfold and what, at this juncture, an investor should do. However, the best presentations demonstrated a curiosity about the future and an optimism that seemed a little out of step with some of the “end of world” worry that seems ubiquitous these days. Looking for opportunities, managing the risks, and staying on top of the big trends are what occupy the minds of these practitioners. They are not devoted to the timeline of the impeachment proceedings, the latest Brexit deadlines or, it seems, many other geopolitical risks. For a firm like ours, that declaims predictive ability, this was not only a good reminder of the importance of an independent-minded, bottom up research process, but also comforting music to my ears. Now, time to get back to work!

The title of this blog post is from a classic pop tune entitled “Work” by Rihanna.

More Like This...

See another CRM2 blog post that may be of interest to you.

CRM2: The Nexus Approach to our CRM2 Reports

Topic:
CRM2
Excerpt:
With changing securities regulations coming into effect, investment firms are now required to provide individual investors with specific additional in

More Like This...

See another Foundations & Endowments blog post that may be of interest to you.

Charitable Giving Made Easier

Topic:
Foundations & Endowments
Excerpt:
Giving to charities and supporting our community are important to us at Nexus. We donate a portion of our management fees back to the charities and

More Like This...

See another Human Interest blog post that may be of interest to you.

The Case for Openness – An Open and Shut Case?

Topic:
Human Interest
Excerpt:
From time immemorial, mankind has been open. Open to new ideas, open to trade, and open to migration – the three critical ingredients for progress.

More Like This...

See another Inside Nexus blog post that may be of interest to you.

Welcome Aboard: Investing in Our Team

Topic:
Inside Nexus
Excerpt:
Nexus recently welcomed Harsh Narsinghani, Vice President & Portfolio Manager, as the newest member of the investment team. His arrival is the latest

More Like This...

See another Investments blog post that may be of interest to you.

Don’t Worry, Be Happy

Topic:
Investments
Excerpt:
A recent article by David Brooks in The Atlantic magazine argues that, despite the heavy shroud of pessimism that envelopes most of our current

More Like This...

See another Pearls of Wisdom blog post that may be of interest to you.

Whither Capitalism?

Topic:
Pearls of Wisdom
Excerpt:
Capitalism, which had seemed to be so ascendant in the way the world was ordered has lately been under siege. And because 2018 marks the 200th

More Like This...

See another Tax Planning blog post that may be of interest to you.

Saving in my Professional Corporation – It’s a Great Idea!

Topic:
Tax Planning
Excerpt:
The ability for professionals in Canada to incorporate their practice has existed for some time. Doctors, dentists, lawyers, accountants, and other

More Like This...

See another Wealth Planning blog post that may be of interest to you.

Dentists Get Their Financial Check-Up: Nexus attends the 2022 Ontario Dental Conference

Topic:
Wealth Planning
Excerpt:
In early May, we had the opportunity to attend the Ontario Dental Association’s (ODA) Annual Spring Meeting (ASM) in Toronto. Now in its 157th year,

On a Side Note…

See another CRM2 Nexus Notes Quarterly article that may be of interest to you.

No posts found.

On a Side Note…

See another Foundations & Endowments Nexus Notes Quarterly article that may be of interest to you.

Charitable Giving Made Easier

Topic:
Foundations & Endowments
Excerpt:
Giving to charities and supporting our community are important to us at Nexus. We donate a portion of our management fees back to the charities and

On a Side Note…

See another Human Interest Nexus Notes Quarterly article that may be of interest to you.

The Case for Openness – An Open and Shut Case?

Topic:
Human Interest
Excerpt:
From time immemorial, mankind has been open. Open to new ideas, open to trade, and open to migration – the three critical ingredients for progress.

On a Side Note…

See another Inside Nexus Nexus Notes Quarterly article that may be of interest to you.

Here we Grow Again!

Topic:
Inside Nexus
Excerpt:
Recently, the Nexus team welcomed our seventh new face to join us since the start of the pandemic in 2020. As growth is an integral part of our

On a Side Note…

See another Investments Nexus Notes Quarterly article that may be of interest to you.

Don’t Worry, Be Happy

Topic:
Investments
Excerpt:
A recent article by David Brooks in The Atlantic magazine argues that, despite the heavy shroud of pessimism that envelopes most of our current

On a Side Note…

See another Pearls of Wisdom Nexus Notes Quarterly article that may be of interest to you.

A Table for None, Please; Working From Home on the Rise

Topic:
Pearls of Wisdom
Excerpt:
Reading is one of the principal occupations in our profession. As we digest a wide range of material, interesting ideas and surprising facts – some

On a Side Note…

See another Tax Planning Nexus Notes Quarterly article that may be of interest to you.

Saving in my Professional Corporation – It’s a Great Idea!

Topic:
Tax Planning
Excerpt:
The ability for professionals in Canada to incorporate their practice has existed for some time. Doctors, dentists, lawyers, accountants, and other

On a Side Note…

See another Wealth Planning Nexus Notes Quarterly article that may be of interest to you.

From The Editor: What’s My Age Again?

Topic:
Wealth Planning, Living to 100
Excerpt:
How old are you? It’s a simple question, one we readily know the answer to, although some of us might not want to talk about it. And why do we know