1/ Been reflecting on 10+ years on the buy side. A few observations....

2/ Institutional investors spend as much time managing people/the team as they do money. Not surprisingly some of the best all-time track records come from solo investors

3/ Constraints decrease returns. Investing in a vacuum is doable. Restricting number of holdings, position size, market cap, geography, “style” and liquidity all reduce returns.

4/ There are a lot of people to please - clients, potential clients, bosses, consultants, sell-side research firms expecting commissions - and they all have different motivations/expectations. This makes it incredibly difficult to focus.

5/ Portfolio managers spend a lot more time than I expected staring at a Factset screen with their live portfolio performance and asking junior folks questions about why a stock is moving up/down that day.

6/ Companies that are large index weights and performing well are incredibly seductive. I frequently saw PMs “neutral weight” these stocks just to stop the pain from watching them outperform every day.

7/ The pressure to “do something”, especially when behind the performance eight-ball, was also immense.

8/ Technical analysis was used far more than people would admit publicly.

9/ Hardly anyone read SEC filings. Info in the 10k, q’s, proxy statements was assumed to be well-known. Ironic.

10/ Performance was generally measured on a calendar year basis b/c this is what comp came back to.

11/ Incentives drive behavior. Full-stop. The risk PMs most worry about is career risk.

12/ The best investors asked the best questions. Often after not saying a word for the first 55 minutes of an hour-long meeting.

13/ It is easy to overestimate the amount of knowledge a person can have about a firm when looking from the outside in. Every interaction with investor relations, expert networks and executives is choreographed and provides a false sense of obtaining unique perspective.

14/ A favorite metric is expense ratio / active share. This simple yet powerful number helps investors determine how much they are paying for potential alpha.

15/ Time horizons shrink under stress which is precisely when one can get paid for extending them.

16/ The biggest mistake was investors not differentiating between fundamentals and expectations. Mauboussin has written about this extensively.

17/ end.