Analysing Investment Skill, a podcast brought to you by Inalytics

Bringing out the best of the elite

Analysing Investment Skill is a discussion between two experts from very different worlds, who have one key thing in common; they work with the elite.

Rick Di Mascio is the CEO of Inalytics, and has over 30 years of experience of working with the best-of-the-best in the investment world. Tim Harkness is renowned sports psychologist and data analyst who has worked with athletes at the very peak of their profession. Together, they share their experiences of working with the top 1% across subjects such as motivation, data analysis, self-reflection and coping with pressure.

Research Paper 10: Track records luck or skill?

It is often thought that Napoleon said “Give me lucky generals” implying that he didn’t mind being lucky if it meant that he still won the battle.

In fact, Napoleon was almost certainly misquoted. It is more likely he was quoting Cardinal Mazarin, who noted that one must not ask of a general : “is he skilful?”, but rather “is he lucky?”

Clearly the consequences of relying on luck in finance are not as significant as in war, but nevertheless, it can be costly.

Download the full study to learn more about how we go about identifying investment skill or contact us to learn more about how we analyse portfolios and decision making to improve the investment process and help select skilful portfolio managers.

Rick Di Mascio’s co-authored research paper is making big news

Inalytics’ CEO, Rick di Mascio, co-authored a research paper entitled Selling Fast and Buying Slow: Heuristics and Trading Performance of Institutional Investors with researchers Lawerence Schmidt of MIT Sloan School of Management, Alex Imas of Carnegie Mellon University, and Klakow Akepanidtaworn of University of Chicago Booth.

Within two weeks of its release, the paper was listed in the SSRN Top 10 downloaded papers of the week and has been viewed over 14,000 times since its publication on January 2, 2019. The paper has received critical acclaim, eliciting invitations to speak at several notable asset management and behavioral economics conferences around the globe, and has been highlighted in several articles across the industry.

These articles include:

Seeking Alpha:

You Likely Stink At Selling

Financial Times:

Why investors suck at selling stocks

Institutional Investor:

Portfolio Managers Are Good at Buying but Stink at Selling

Morningstar:

When Rules of Thumb Fail

What Fund Managers Get Right

Financial Times:

How to pick a successful stockpicker

The Hans India:

Do due diligence well before selling a stock

Roger Montgomery Re-inventing the Way You Invest:

Analysis in Selling could be just as important as Buying

UK Uncensored

The dumbest mistake professional investors make

Blog: The Big Picture by Barry Ritholtz

Stock-Pickers Don’t Know How to Sell

Upcoming Events

TBD (Come back to review upcoming conferences, speaking engagements and webex dates)

Booking

To book Rick di Mascio to speak at your event, please email Anthony Grocott agrocott@inalytics.com.

For more information on Inalytics, click here

Brunel launches plans for Emerging Markets

Brunel Pension Partnership has announced its plans for launching its Emerging Marketings Equities sub-fund. Inalytics is excited to be working with the team at Brunel to find the best in class managers for these selection exercises.

To read the full article click here

 

 

Brunel Pension Partnership works with Inalytics

Brunel Pension Partnership is one of eight national pooled funds and the company is celebrating bringing £6bn under its management on the one year anniversary of its launch. With Brunel’s belief in making long-term, sustainable investments supported by robust and transparent processes; Inalytics is proud to have partnered with them on their Transition and Manager selection exercises.

To read the full article click here

Selling Fast & Buying Slow

Alex Imas of Carnegie Mellon University, Lawrence Schmidt of MIT Sloan School of Management, Klakow Akepanidtaworn of University of Chicago Booth School of Business and Rick Di Mascio, CEO and Founder of Inalytics, co-authored the paper Selling fast & buying slow: Heuristics & trading performance of institutional investors. The team studied 783 institutional portfolios from Inalytics’ anonymised database of elite equity portfolio managers.

In summary, the research revealed that individual selling decisions cost managers nearly 100 basis points of performance annually. The paper goes on to uncover why the loss of alpha is so great and even suggests that a randomised selling approach would benefit most institutional investors, who do not historically employ the same rigorous research methodologies when selling their holdings as they do when making a decision to buy.

Download the full academic paper or contact us to learn more about how we analyse portfolios and decision making to improve the investment process and help select skilful portfolio managers.

Research Paper 09: Does it pay to own companies that do the right thing?

Does the relationship between a company’s market capitalisation, its corporate governance and its share price return stand the test of time?

Our earlier paper tested this thesis looking at two years of data, here we conduct a more rigorous review with five years of data.

Download the full study to learn more about how we go about identifying investment skill or contact us to learn more about how we analyse portfolios and decision making to improve the investment process and help select skilful portfolio managers.

Hedge Fund Magazine features Inalytics in piece on behavioural analytics

The article profiles hows Inalytics provides analytical feedback in order to improve decision making.

Di Mascio, who says his firm has analysed some 100 million investment decisions across more than 900 portfolios, says data shows there are common pitfalls many traders make.

“Instead of doing what they should do, which is run winners and cut losers, portfolio managers typically will cut their winners too early and hang on to losers too long,” he explains.

“The purpose is to provide the link between the decision that they take and the performance to see where the strengths and weaknesses are.”

The full text of the article is available here

Memory vs. Analytics

We came across some interesting research on the pitfalls of relying on memory to assess performance.

‘We focus on the few striking events that happened rather than the countless events that failed to happen’ – Daniel Kahneman Thinking, Fast and Slow

This examines the utility of human memory as an effective tool for improvement.

You can download the research article here: Research Article – Memory vs. Analytics