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Above The Fray: Creating Serenity

Above The Fray: Creating Serenity by Jeffrey Stacey, Stacey Muirhead Capital Management

Since I began my career as a professional investment manager, I have always spent time thinking about what inputs are necessary to create an ideal environment for optimal investment decision making. While this topic has been getting more attention from investment managers and their clients in recent years, it is still not given enough attention by most in my judgement. While this blog will only scratch the surface of this important issue, let me start by saying that creating an ideal environment involves both external considerations as well the ability for a manager to show some discipline over his or her internal behaviour. While there are many aspects of creating the ideal environment that are common to most managers, I also believe that many aspects are unique to each individual. It is crucial for a manager to figure out these unique considerations about their individual situations and rigorously adopt them as quickly as they are discovered. In my case, I must confess that I have learned too many of these considerations through trial and error, often costly, rather than through a deliberate and proactive process.

Consider the following statement from Warren Buffett:

I insist on a lot of time being spent, almost every day, to just sit and think. That is very uncommon in American business. I read and think. So I do more reading and thinking, and make less impulse decisions than most people in business. I do it because I like this kind of life”.

Given that Warren Buffett’s primary responsibility at Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) is capital allocation, he could have just as easily substituted the word investing for...