The Losers Game

Today’s post is an article by Charles D Ellis titled “The Losers Game”. The article was forwarded to me by Barry Pasikov of Hazelton Capital Management. “The Losers Game” won the investments profession’s Graham & Dodd award in 1977. Having read the article twice, I highly recommend it- its a must read for anyone seeking to become a well rounded investor. (Click here to skip introduction and Read the Losers Game)

Background On Charles D Ellis (Via Yale School of Management)

Charles D. Ellis serves as a consultant to large institutional investors and wealthy families and as managing partner of a pro bono partnership of nearly 100 Harvard Business School classmates and friends, Partners of ’63, which commits time and treasure in support of entrepreneurial, change-oriented ventures in education, particularly those focused on children born into tough circumstances. The author of 14 books, including The Partnership: The Making of Goldman Sachs (Penguin), Joe Wilson (John Wiley & Sons), CAPITAL (John Wiley & Sons), and Winning the Loser’s Game (McGraw-Hill), Charley has written nearly 100 articles for business and professional journals. His article, “The Loser’s Game,” won the investment profession’s Graham & Dodd Award in 1977.

Article Excerpts:

“Gifted, determined, ambitious professionals have come into investment management in such large numbers during the past 30 years that it may no longer be feasible for any of them to profit from the error of all the others sufficiently often and by sufficient magnitude to beat the market averages”

“The more important it is to his sense of self-esteem and sense of inner worth – the more tenaciously he will hold on to the old concept and the more insistently he will assimilate, ignore or reject new evidence that conflicts with his old and familiar concept of the world”

“My experience with very bright and articulate investment managers is that their skills atanalysis and logical extrapolation are very good, often superb, but that their brilliance in extending logical extrapolation draws their own attention far away from the sometime erroneous basic assumptions upon which their schemes are based.”

“The belief that active managers can beat the market is based on two assumptions: (1) liquidity offered in the stock market is an advantage, and (2) institutional investing is a Winner’s Game.”

Click here to Read the Losers Game (file is a PDF)



About Miguel Barbosa

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17. September 2008 by Miguel Barbosa
Categories: Curated Readings, Finance & Investing | Leave a comment

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