I’ll say the unfashionable thing out loud: I’d rather be reliably a little bit right than occasionally spectacularly right.
Quantitative Investment Director Ross Olusanya says the most underrated edge in investing is consistency, not brilliance. Find out why.
In a business that rewards the bold call and the star manager, that sounds like an admission of low ambition.
I think it’s the opposite.
The maths is unsentimental. Consistency can never be taken for granted, but a strategy that adds a small, steady edge and manages to keep it, year after year, without a blow-up, has the potential to compound into something serious.
Consistency isn’t the boring cousin of performance.
A strategy that shoots the lights out one year and hands it all back the next does not. The second kind gets the headlines. The first tends to make people richer.
Consistency isn’t the boring cousin of performance. Over a long enough horizon, it is the performance.
The myth of brilliance
Investment culture finds this hard to accept. Too often investors celebrate the manager who got one big call spectacularly right and mistake one successful outcome for repeatable skill.
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