Investment performances tend to look better when smoothed out over an extended period of time.
Stripping out the volatility and ironing out the creases can give the impression that a fund ascended consistently over five, 10 or 20 years. Downturns and upswings can be practically erased.
In many ways, it’s not dissimilar to a career in financial services. The know-how and confidence of longstanding industry figures belies the years of learning hard lessons and taking all manner of knocks and bruises along the way.
In this feature, we will be showcasing the most important lessons people have learned over their careers.
We start with Gary Greenberg (pictured), who retired as head of global emerging markets at Federated Hermes International at the end of June.
Learn from your mistakes
Speaking to Portfolio Adviser ahead of stepping down from his 37-year career, Greenberg quoted the old adage “ride your winners, cut your losers”, which he acknowledged was much easier said than done.
“Until you’ve lived with a loser for four or five years and it has just eaten away at you, you don’t learn how to just give up and say ‘life would be so much nicer if I didn’t have to look at this damn thing again’.
“The good thing about fund management is that you can’t bluff. Those numbers speak. And you either get it right or you don’t. If you have longevity as a fund manager, it’s because you learn from your mistakes.”
It was Greenberg’s response to my follow-up question – ‘What was the biggest learning moment in your career?’ – that inspired this article series.
“Back in 1990, I recommended to my firm that we buy the stock of Euro Disney. I had read the entire 240-page offering document because I was young and keen,” he joked. “On page 139, I had read that if Euro Disney makes more than ‘X’ profit, all that goes to Disney, none goes to the Euro Disney shareholders.” Greenberg came to the conclusion that investing in the company “was a terrible idea”.
“But then I listened to all the brokers, none of them mentioned that.” When he raised it with them, Greenberg’s concerns were dismissed and his objections faltered. “So, I recommended it. It seemed like a great idea, a theme park in the middle of Paris, all of Europe would go to it.”
But his first instinct was ultimately proved right, and the caveat that Greenberg spotted on page 139 of the 240-page document “was the thing that made the stock do terribly”.
Experience is the best teacher
To remember those details, 32 years after making that decision, is evidence enough of how people can carry around razor-sharp memories that help them make different calls in future.
Over the course of his career, Greenberg has tried to impart some of his lessons to colleagues but appreciates that lived experience is ultimately the best teacher. That said, if any readers would like to share the biggest lesson they have learned over the course of their career, please get in touch.
This article first appeared in the September edition of Portfolio Adviser Magazine
