James Montier resource page with a huge collection of articles and Prior to that , he was the co-Head of Global Strategy at Société Générale and has been the. James Montier, GMO. James is a member of GMO’s Asset Allocation team. Prior to joining GMO in , he was co-head of Global Strategy at Société Générale. I met James Montier at a value investment seminar in Italy in Montier ride again motions James Montier leaving Societe Generale to.
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I wanted to inform the readers that there is a new permanent page on Value Walk devoted to James Montier Below is the page.
You can also find it under Current Value Investors. Although, James Montier does not have his own fund, he has valuable information. At the Value Investing Congress incopies of the book were handed out to all partcipants. The credit for this page goes to my colleague and friend, Tim. I modified a few things but the content was put together almost entirely by Tim.
He gave me permission to post on Value Walk. Tim du Toit is editor and founder of Eurosharelab. On his website he reveals what more than 20 years of equity investment have taught him — sometimes at considerable cost.
I met James Montier at a value investment seminar in Italy in where he presented. We had long discussions later the day and into the evening on value investing and investment strategy.
James was kind enough to put me on his distribution list and I really looked forward to each of his articles as they always taught me something.
Unfortunately James decreased his writings since taking a position with the asset manager GMO in Tools and Techniques for Intelligent Investment.
Be sure to add it to your RSS reader. The essence of investment was to seek out value; to buy what was cheap with a margin of safety. Investors could move up and down the capital structure from bonds to equities as they saw fit. If nothing fit the criteria for investing, then cash was the default option. Or, Ten Lessons Not Learnt from the financial crisis. In November article titled Only White Swans on the Road to Revulsion James Montier makes the argument that that the housing bubble and the crisis following its collapse was not an unforeseen event but rather the result of over optimism and the illusion of control, two classic human behavioural mistakes.
He explores the possibility that all the government rescue packages initiated in have the possibility to again inflate a substantial bubble. Efficient markets theory is dead. James Montier explains why the efficient markets theory is dead but still lives because of academic inertia. He also gives a few short ideas from his shorting screen. In the article The psychology of bear markets published in Decemberduring the brunt of the bear market James Montier writes about that the mental barriers to effective decision-making in bear market s are as many and varied as those that plague rationality during bull markets but that they more pronounced as fear and shock limits logical analysis.
James wrote that fifteen stocks in the U. It makes no sense to forecast, the importance of a margin of safety, avoid trying to time the market and buy cheap insurance. But most importantly, humility should be the central theme of a good investment process. James Montier writes about the whether company visits are useful for fund managers.
The answer in general is no but they can be improved by learning to look for evidence that disagrees with us, and seek to disprove our ideas, rather than illustrate them with supportive evidence. The details of each bubble are different but the general patterns remain very similar. He also touches on the propensity for commentators to continually proclaim the end of the problem and a resumption of business as usual.
If you have any interest at all in short selling this is an article for you. Pirates, Spies and Short Sellers. In the article he explains a simple short screen with surprising results shown through back testing in the USA and Europe.
He points out that this is why they are all overoptimistic and how you can avoid falling into the same trap. James Montier makes a strong argument that the mess in the US economy and housing market was not caused by a black swan event unpredictable but rather was sadly predictable.
It follows the standard pattern of a bubble deflating, some thing that we have seen a thousand times before. How right he was. He argues that investors focusing on sectors rather than stocks are barking up the wrong tree. At the link above you can read parts of the book at Google Books.
James Montier | Value Invest
James Montier presents even more evidence that humans cannot forecast and why you should avoid generald to anyone who says he can as well as avoid it yourself. He identifies shorting candidates through a measurement called the M score. Past results are impressive in identifying under-performing companies. Here he comes up with a collection of his best books in different categories classics, modern, psychological and hidden gems that is arguably the best reading list for any aspiring investor.
It creeps into almost every discussion on finance.
And them he goes on to systematically take the model apart with real life examples and evidence. James Montier, iames his usual style puts himself against the common view saying that the then biggest consensus portfolio bets to him seemed to be small cap and low quality however large cap, high quality looks like the better bet to him.
Value plus quality seems to make sense. Give it a try! For example he writes that the first sin was placing forecasting at the very heart of the investment process. An enormous amount of evidence suggests that investors are generally hopeless at forecasting.
Montier quits SocGen for hedge fund | Reuters
So using forecasts as an integral part of the investment process is like tying one hand behind your back before you start. Lessons from behavioural finance and for corporate governancewrote at the end of January James Montier says even though it is tempting to believe bad behaviour is the result of a few rotten jmaes.
However, the overwhelming psychological evidence suggests that if you put good people into bad situations they usually turn bad. He found that gendrale average professional investors are using between one and two steps of strategic thinking in forming their expectations.
He also found that many investors suffer the curse of knowledge and end up either picking zero or severely underestimating the irrationality of other players. These results speak directly to the ability of investors to exit the market before the mass exodus.
He found, unsurprisingly, that only a very small minority shows the required level of strategic thinking to beat the gun.
Its a great summary of a lot of his previous work in a presentation format, summarised in bullet points and graphs. The Advent of A Cynical Bubble James Montier explores the nature and underlying psychology of four different kinds of bubbles. To assess which comes closest to describing the current market. To us, the current market environment is largely a greater fool market. Because such markets lack fundamental support, they are liable to precipitous declines.
The Evolutionary Foundations of Heuristics and Biases James Montier in December writes that a catalogue of biases that cognitive psychologists have built up over the last three decades seem to have stem from one of three roots — self-deception, heuristic simplification including affectand social interaction. In this paper James explores the evolutionary basis of each of these roots.
We evolved in a very different environment, and it is that ancestral evolutionary environment that governs the way in which we think and feel. Our minds are suited for solving problems related to our survival, rather than being optimised for investment decisions.
We all make mistakes when we make decisions. The list below gives a top ten list for avoiding the most common investment mental pitfalls. Montier is the author of four market-leading books: The Little Book of Behavioral Investing: The problems experienced by the quant funds in August may help highlight some of these issues. Never Miss A Story!
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