The Value Perspective with Maria Konnikova

This week we're joined by Maria Konnikova. She is an author, a professional poker player, and psychologist. Maria shares with us how she utilised different techniques during her poker career that shaped how she thought about probabilities like the description-experience gap, weighing risk vs. reward and communicating and framing risk. She has found these mindsets have helped in a wide variety of situation from Covid-19 to analysing Presidential Election pundits. 

Maria's newest book The Biggest Bluff: How I Learned to Pay Attention, Master Myself and Win is available now. 

Episode minutes:

01:07 Intro

03:36 Thinking in probability: nature or nurture? 

07:29 How can thought processes learned in poker be used in everyday life? 

10:25 What is the best way to better communicate complex messages about risk? 

15:18 The Power of Variance: why probability doesn't care about history or the past

20:57 Streamlining and optimising your thought processes under pressure 

25:01 What is a bad decision you made? 

27:29  Book Recommendations: The Data Detective by Tim Harford

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Important information. This podcast is for investment professionals only.

This information is not an offer, solicitation or recommendation to buy or sell any financial instrument or to adopt any investment strategy.

Any data has been sourced by us and is provided without any warranties of any kind. It should be independently verified before further publication or use. Third party data is owned or licenced by the data provider and may not be reproduced, extracted or used for any other purpose without the data provider’s consent. Neither we, nor the data provider, will have any liability in connection with the third party data.

Reliance should not be placed on any views or information in the material when taking individual investment and/or strategic decisions. Any references to securities, sectors, regions and/or countries are for illustrative purposes only. The views and opinions contained herein are those of individual to whom they are attributed, and may not necessarily represent views expressed or reflected in other communications, strategies or funds.

The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall.

Past Performance is not a guide to future performance and may not be repeated.

The forecasts included should not be relied upon, are not guaranteed and are provided only as at the date of issue. Our forecasts are based on our own assumptions which may change.

The Value Perspective with Jake Taylor

In the first episode of 2021, we have Jake Taylor, CEO of Farnam Street Investments, author of The Rebel Allocator and host of the Five Good Questions podcast and Value: After Hours series on YouTube. Jake, like us, seeks to apply learnings from other professions and perspectives to value investing. Committed to value investing since he had lunch with Warren Buffet while in business school, Jake shares with us his passion for learning from others and discussing the value style with potential converts.  

You can find Jake on Twitter @farnamjake1

Episode minutes:

01:07 Intro

01:53 Jake’s background

03:36 How Jake became involved in value investing

04:49 Value investing in financial education

07:45 The role of accounting in value investing

08:38 Jake’s podcast, YouTube series, and book

13:15 A call from Charlie Munger

16:00 How do we know if something is True?

20:05 How to implement base rates and other ‘best practices’

24:39 How do you deal with uncertainly and maintain long term focus in an industry that is increasingly short term?

28:08  How do you make decisions when faced by a litany of individual probabilities with the visible and invisible webs?

34:03 The power of saying ‘no’

37:42 Reflecting on reasons why you said no

41:25  What is a bad decision you made?

45:40 Book Recommendations: Nature of Value by Nick Gogerty, Nonzero: History, Evolution, and Human Cooperation by Robert Wright and The Essays of Warren Buffett

NEW EPISODES:

You can subscribe via Podbean or use this feed URL (https://tvpschroders.podbean.com/feed.xml) in Apple Podcasts and other podcast players.

GET IN TOUCH:

send us a tweet: @TheValueTeam 

Important information. This podcast is for investment professionals only.

This information is not an offer, solicitation or recommendation to buy or sell any financial instrument or to adopt any investment strategy.

Any data has been sourced by us and is provided without any warranties of any kind. It should be independently verified before further publication or use. Third party data is owned or licenced by the data provider and may not be reproduced, extracted or used for any other purpose without the data provider’s consent. Neither we, nor the data provider, will have any liability in connection with the third party data.

Reliance should not be placed on any views or information in the material when taking individual investment and/or strategic decisions. Any references to securities, sectors, regions and/or countries are for illustrative purposes only. The views and opinions contained herein are those of individual to whom they are attributed, and may not necessarily represent views expressed or reflected in other communications, strategies or funds.

The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall.

Past Performance is not a guide to future performance and may not be repeated.

The forecasts included should not be relied upon, are not guaranteed and are provided only as at the date of issue. Our forecasts are based on our own assumptions which may change.

The Value Perspective with Marvin Barth

Marvin Barth, Head of FX and EM Macro Strategy at Barclays, joins Andy Evans and Juan Torres Rodriguez on this episode of the Value Perspective. In July, Marvin wrote a piece called 'Managing Uncertainty' which explores how, in this current time of uncertainly, we can look back to other instances like the Great Depression and Dot Com Burst, to learn how people behave under these circumstances and how you can avoid common behaviour traps. 

RUNNING ORDER: 

01:07 Intro

01:36 Managing Uncertainty - what do people do during times of uncertainty?

06:55 Defining risk and uncertainty - in quantifiable and un-quantifiable terms 

11:58 Is this the most uncertain time we've been through in the modern era? 

16:01 Has the greater availability of information increased or decreased uncertainty? 

18:17 How can measurements of uncertainty be factored into risk models?

21:30 How is asset pricing affected by uncertainty? 

24:53 What behaviours changes can be observed during times of uncertainty - chronic stress vs. acute stress

27:46 Marvin's five step framework for making better decisions 

33:52 Does a framework give us false confidence when dealing with uncertainty? 

35:44 An example of a bad decision that was due to luck or process and book recommendations: Calling Bulls**t: the Art of Scepticism in a Data-Driven Work by Carle T Bergstrom and Jevin D West

NEW EPISODES:

You can subscribe via Podbean or use this feed URL (https://tvpschroders.podbean.com/feed.xml) in Apple Podcasts and other podcast players.

GET IN TOUCH:

send us a tweet: @TheValueTeam 

Important information. This podcast is for investment professionals only.

This information is not an offer, solicitation or recommendation to buy or sell any financial instrument or to adopt any investment strategy.

Any data has been sourced by us and is provided without any warranties of any kind. It should be independently verified before further publication or use. Third party data is owned or licenced by the data provider and may not be reproduced, extracted or used for any other purpose without the data provider’s consent. Neither we, nor the data provider, will have any liability in connection with the third party data.

Reliance should not be placed on any views or information in the material when taking individual investment and/or strategic decisions. Any references to securities, sectors, regions and/or countries are for illustrative purposes only. The views and opinions contained herein are those of individual to whom they are attributed, and may not necessarily represent views expressed or reflected in other communications, strategies or funds.

The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall.

Past Performance is not a guide to future performance and may not be repeated.

The forecasts included should not be relied upon, are not guaranteed and are provided only as at the date of issue. Our forecasts are based on our own assumptions which may change.

The Value Perspective with Hannah Mills

This week, the Value Team met with Hannah Mills, Olympic Sailor for Team GB who brought home the Silver in the 2012 Olympics and then the Gold in 2016 from Rio. Simon Adler, a fund manager in the Value Team and Sophie Ainsworth, a Team GB sailor and Schroders employee discuss with Hannah decision making on and off the water.

RUNNING ORDER: 

01:07 Intro

01:37 Why decision making is integral in Olympic planning

03:57 How accurate to you think your decisions making is and how its changed over time? 

04:55 What process have you put in place to improve your decision making in race environment? 

06:06 What type of biases affect your decision making?

07:05 How does data inform your decisions? 

08:26 Decision making in pairs

12:27 Adapting from solo sailing to team sailing  

14:40 Sports psychology and how it helps open up viewpoints

17:51 Are you better at decision making in risky or safe environments? 

19:38 What skills have you learned from psychology that help with decision making in races?

20:50 Are there any decisions that haunt you? 

26:06 Have you found the decision making learned from sailing has followed you into everyday life? 

28:28  Book recommendations: Thinking Fast and Slow by Daniel Kahneman

NEW EPISODES:

You can subscribe via Podbean or use this feed URL (https://tvpschroders.podbean.com/feed.xml) in Apple Podcasts and other podcast players.

GET IN TOUCH:

send us a tweet: @TheValueTeam 

Important information. This podcast is for investment professionals only.

This information is not an offer, solicitation or recommendation to buy or sell any financial instrument or to adopt any investment strategy.

Any data has been sourced by us and is provided without any warranties of any kind. It should be independently verified before further publication or use. Third party data is owned or licenced by the data provider and may not be reproduced, extracted or used for any other purpose without the data provider’s consent. Neither we, nor the data provider, will have any liability in connection with the third party data.

Reliance should not be placed on any views or information in the material when taking individual investment and/or strategic decisions. Any references to securities, sectors, regions and/or countries are for illustrative purposes only. The views and opinions contained herein are those of individual to whom they are attributed, and may not necessarily represent views expressed or reflected in other communications, strategies or funds.

The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall.

Past Performance is not a guide to future performance and may not be repeated.

The forecasts included should not be relied upon, are not guaranteed and are provided only as at the date of issue. Our forecasts are based on our own assumptions which may change.

The Value Perspective with Annie Duke pt 2

Annie Duke returns for her second appearance on the The Value Perspective. Juan Torres Rodriguez sat down to discuss with Annie more about the probabilistic mind-set. Annie shows how using probabilities to observe your everyday actions can help you to understand the decisions that you make and recognise how and why you make guesses. Her new book ‘How to Decide: Simple Tools for Making Better Choices’ is available now.

Minutes:

01:06 Intro to Annie 

02:03 How can you help people to think about probabilities? How can use it to express uncertainty?

11:36 Using ranges to understand uncertainty – The Archer’s Mindset

17:10 How can you get better at understanding base rates?

27:28 Overcoming dispersion within a team

35:22 Making decisions under time pressure

41:06 Are outcomes only interesting when they weren’t what you expected?

53:43 How do you avoid “resulting” in reaction to bad outcomes?

01:01:26 Can you give an example of a decision that resulted in a bad outcome?

This episode's book recommendations: 

• The Psychology of Money: Timeless lessons on wealth, greed, and happiness by Morgan Housel
• The Biggest Bluff: How I Learned to Pay Attention, Take Control and Master the Odds by Maria Konnikova 

• How to Change: the Science of Getting From Where You Are To Where You Want to Be by Katy Milkman (available for pre-order)

NEW EPISODES:

You can subscribe via Podbean or use this feed URL (https://tvpschroders.podbean.com/feed.xml) in Apple Podcasts, Spotify, and other podcast players.

GET IN TOUCH:

send us a tweet: @TheValueTeam 

Important information. This podcast is for investment professionals only.

This information is not an offer, solicitation or recommendation to buy or sell any financial instrument or to adopt any investment strategy.

Any data has been sourced by us and is provided without any warranties of any kind. It should be independently verified before further publication or use. Third party data is owned or licenced by the data provider and may not be reproduced, extracted or used for any other purpose without the data provider’s consent. Neither we, nor the data provider, will have any liability in connection with the third party data.

Reliance should not be placed on any views or information in the material when taking individual investment and/or strategic decisions. Any references to securities, sectors, regions and/or countries are for illustrative purposes only. The views and opinions contained herein are those of individual to whom they are attributed, and may not necessarily represent views expressed or reflected in other communications, strategies or funds.

The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall.

Past Performance is not a guide to future performance and may not be repeated.

The forecasts included should not be relied upon, are not guaranteed and are provided only as at the date of issue. Our forecasts are based on our own assumptions which may change.

The Value Perspective with Taylor Pearson

In this episode, Juan and Andy speak with Taylor Pearson, a fund manager with a particular interest in creating research-backed systems to make decisions in an uncertain world, thus making people more ‘antifragile’.

One of these systems included ergodicity which can be explained as a scenario where the average outcome of the group is the same as the average outcome of the individual over time. An example of an ergodic systems would be the outcomes of a coin toss (heads/tails). If 100 people flip a coin once or 1 person flips a coin 100 times, you get the same outcome. Taylor discusses how this theory can help people make decisions in uncertain environments.

Minutes:

01:10 Intro to Taylor 

01:35 Notable days in history and their volatility

03:59 How do you define risk?

05:43 What is ergodicity?

08:23 Where is ergodicity relevant in our everyday life?

16:42 What is the best advice to give someone who may be succumbing to non-ergodic systems?

18:53 How does ergodicity apply in stock market scenarios?

23:53 How does diversification play a part?

26:25 Does diversification need to be oppositional?

29:52 How do you communicate probability in a way clients easily understand?

31:45 The Kelly Criterion: utilising a theory to size your decisions

34:36 An example of a bad decision

36:08 Book Recommendations – The Three Body Problem by Liu Cixin and The Origins of Political Order by Francis Fukuyama

NEW EPISODES:

You can subscribe via Podbean or use this feed URL (https://tvpschroders.podbean.com/feed.xml) in Apple Podcasts, Spotify, and other podcast players.

GET IN TOUCH:

send us a tweet: @TheValueTeam 

Important information. This podcast is for investment professionals only.

This information is not an offer, solicitation or recommendation to buy or sell any financial instrument or to adopt any investment strategy.

Any data has been sourced by us and is provided without any warranties of any kind. It should be independently verified before further publication or use. Third party data is owned or licenced by the data provider and may not be reproduced, extracted or used for any other purpose without the data provider’s consent. Neither we, nor the data provider, will have any liability in connection with the third party data.

Reliance should not be placed on any views or information in the material when taking individual investment and/or strategic decisions. Any references to securities, sectors, regions and/or countries are for illustrative purposes only. The views and opinions contained herein are those of individual to whom they are attributed, and may not necessarily represent views expressed or reflected in other communications, strategies or funds.

The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall.

Past Performance is not a guide to future performance and may not be repeated.

The forecasts included should not be relied upon, are not guaranteed and are provided only as at the date of issue. Our forecasts are based on our own assumptions which may change.

The Value Perspective with Sean Sutcliffe, CEO of Oxford Space Systems

Juan and Andrew met with Sean Sutcliffe, the CEO of Oxford Space Systems, to learn how he deals with uncertainty not only in a start up business but also in a complex environment like space. 

RUNNING ORDER:

01:12 Introduction

01:47 How does uncertainty impact a space start up?

03:41 Balancing market and technical uncertainties

05:33 Start-ups vs incumbents: Finding success through exploiting niches

08:14 How do you instil patience in investors over long timelines in a short-term focus environment?

12:30 Utilising milestones to help investors understand the component of time.

14:15 How the scientific approach to engineering testing aligns with market testing

17:49 Coping with failure and unexpected surprises

20:21 Understanding when you need to make a change in direction

24:33 Removing bias from investment cases – the human element in company management

26:51 When a good decision has a bad outcome

29:16 How do you build a successful team?

32:07 Book recommendation

NEW EPISODES:

You can subscribe via Podbean or use this feed URL (https://tvpschroders.podbean.com/feed.xml) in Apple Podcasts, Spotify, and other podcast players.

GET IN TOUCH:

send us a tweet: @TheValueTeam 

Important information. This podcast is for investment professionals only.

This information is not an offer, solicitation or recommendation to buy or sell any financial instrument or to adopt any investment strategy.

Any data has been sourced by us and is provided without any warranties of any kind. It should be independently verified before further publication or use. Third party data is owned or licenced by the data provider and may not be reproduced, extracted or used for any other purpose without the data provider’s consent. Neither we, nor the data provider, will have any liability in connection with the third party data.

Reliance should not be placed on any views or information in the material when taking individual investment and/or strategic decisions. Any references to securities, sectors, regions and/or countries are for illustrative purposes only. The views and opinions contained herein are those of individual to whom they are attributed, and may not necessarily represent views expressed or reflected in other communications, strategies or funds.

The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall.

Past Performance is not a guide to future performance and may not be repeated.

The forecasts included should not be relied upon, are not guaranteed and are provided only as at the date of issue. Our forecasts are based on our own assumptions which may change.

The Value Perspective with Expedition Ice Maiden

This week Nick and Juan meet Maj Nics Wetherill and LSgt Sophie Montagne, members of the Ice Maiden Expedition, the first all-female team to ski coast-to-coast across Antarctica by muscle power alone, to discuss making risk decisions as a team in the most extreme of environments.

RUNNING ORDER:

01:00 Introduction

03:20 How do you assemble a team?

08:00 Identifying what characteristics make for a strong, cohesive team in difficult conditions

10:45 The ‘human element’ versus technical skills

13:20 Learning to lead from other’s failures

15:47 Utilising outside perspectives to review planning

17:36 How do you build a process to prepare for the unknown?

20:08 How did you decide on roles within the team?

23:56 The decision framework within a democratic team

26:25 Preparing for and dealing with uncontrollable factors

30:32 How to weigh risk against reward

32:20 Ensuring that all team members are equipped mentally and physically

35:57 Key takeaways

NEW EPISODES:

You can subscribe via Podbean or use this feed URL (https://tvpschroders.podbean.com/feed.xml) in Apple Podcasts, Spotify, and other podcast players.

GET IN TOUCH:

send us a tweet: @TheValueTeam 

Important information. This podcast is for investment professionals only.

This information is not an offer, solicitation or recommendation to buy or sell any financial instrument or to adopt any investment strategy.

Any data has been sourced by us and is provided without any warranties of any kind. It should be independently verified before further publication or use. Third party data is owned or licenced by the data provider and may not be reproduced, extracted or used for any other purpose without the data provider’s consent. Neither we, nor the data provider, will have any liability in connection with the third party data.

Reliance should not be placed on any views or information in the material when taking individual investment and/or strategic decisions. Any references to securities, sectors, regions and/or countries are for illustrative purposes only. The views and opinions contained herein are those of individual to whom they are attributed, and may not necessarily represent views expressed or reflected in other communications, strategies or funds.

The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall.

Past Performance is not a guide to future performance and may not be repeated.

The forecasts included should not be relied upon, are not guaranteed and are provided only as at the date of issue. Our forecasts are based on our own assumptions which may change.

The Value Perspective with Hector Ibarra, CEO of Global Parametrics

In this episode, we have the opportunity to sit down with Hector Ibarra, the CEO of Global Parametrics. Hector has worked for over 20 years in innovating the financial industry's approach to disaster risk financing products. We discuss how his company creates products that help people hedge their risks against natural disasters and increase their chances of survival.

RUNNING ORDER:

00:52   Introduction

01:57   What are parametrics?

03:37   Hedging products vs. Insurance products

06:55   How do you define and quantify risk in an environment where there is little data?

09:54   Pricing in the unknown

11:53   The human dimension in Emerging Markets: how to approach risk when in survival mode

14:18   Acknowledging the systemic risk of climate change

16:26   Short term memory: telling the complex story of climate change to a global audience

19:22   Working with the scientific community to inform your decisions

20:58   Contextualising risk and probabilities through art and games

24:07   How do you communicate risk to clients?

26:20   Creating scenarios when working with catastrophes

27:52   The importance of ESG investing for emerging markets

NEW EPISODES:

You can subscribe via Podbean or use this feed URL (https://tvpschroders.podbean.com/feed.xml) in Apple Podcasts and other podcast players.

GET IN TOUCH:

send us a tweet: @TheValueTeam 

Important information. This podcast is for investment professionals only.

This information is not an offer, solicitation or recommendation to buy or sell any financial instrument or to adopt any investment strategy.

Any data has been sourced by us and is provided without any warranties of any kind. It should be independently verified before further publication or use. Third party data is owned or licenced by the data provider and may not be reproduced, extracted or used for any other purpose without the data provider’s consent. Neither we, nor the data provider, will have any liability in connection with the third party data.

Reliance should not be placed on any views or information in the material when taking individual investment and/or strategic decisions. Any references to securities, sectors, regions and/or countries are for illustrative purposes only. The views and opinions contained herein are those of individual to whom they are attributed, and may not necessarily represent views expressed or reflected in other communications, strategies or funds.

The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall.

Past Performance is not a guide to future performance and may not be repeated.

The forecasts included should not be relied upon, are not guaranteed and are provided only as at the date of issue. Our forecasts are based on our own assumptions which may change.

The Value Perspective with Annie Duke

The Value Perspective team sit down with former professional poker player and author of Thinking Bets, Annie Duke to discuss probabilistic thinking, base rates, and outcome focus thinking. 

RUNNING ORDER:

01:26 Why thinking probabilistically is helpful in decision making

03:30 How do we scale probabilistic thinking in line with more complex situations?

08:30 Working with incomplete information 

10:46 How to utilise reference classes to sharpen your probabilistic thinking

13:30 Using outside perspectives to test your thinking

19:00 What is tilt and how do we overcome it?

31:23 How are you focusing on decision quality?

41:57 Working with longer time frames when assessing decisions

NEW EPISODES:

You can subscribe via Podbean or use this feed URL (https://feed.podbean.com/schroderstvp/feed.xml) in Apple Podcasts and other podcast players.

GET IN TOUCH:

send us a tweet: @TheValueTeam 

Important information. This podcast is for investment professionals only.

This information is not an offer, solicitation or recommendation to buy or sell any financial instrument or to adopt any investment strategy.

Any data has been sourced by us and is provided without any warranties of any kind. It should be independently verified before further publication or use. Third party data is owned or licenced by the data provider and may not be reproduced, extracted or used for any other purpose without the data provider’s consent. Neither we, nor the data provider, will have any liability in connection with the third party data.

Reliance should not be placed on any views or information in the material when taking individual investment and/or strategic decisions. Any references to securities, sectors, regions and/or countries are for illustrative purposes only. The views and opinions contained herein are those of individual to whom they are attributed, and may not necessarily represent views expressed or reflected in other communications, strategies or funds.

The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall.

Past Performance is not a guide to future performance and may not be repeated.

The forecasts included should not be relied upon, are not guaranteed and are provided only as at the date of issue. Our forecasts are based on our own assumptions which may change.