Return of the Active Manager
How to apply behavioral finance to renew and improve investment management
By C. Thomas Howard and Jason Apollo Voss
Return of the Active Manager
How to apply behavioral finance to renew and improve investment management
By C. Thomas Howard and Jason Apollo Voss
Jacket text
Emotional behavior and biases run throughout financial markets. This is the diagnosis of behavioral finance.
But it is not enough to know that investors make biased decisions. What do we do about it? How do we move beyond diagnosis, to prescription?
In this groundbreaking new book, investing and behavioural finance experts Thomas Howard and Jason A. Voss plug this void and show the new way ahead for investment managers and advisors. Return of the Active Manager provides a set of tools for investment professionals to overcome and take advantage of behavioral biases.
Across seven compelling chapters, Return of the Active Manager details actionable advice on topics such as behaviourally-enhanced fundamental analysis, active equity fund evaluation and selection, harnessing big data, and investment firm structure. You learn how to exploit behavioural price distortions, how to recognise and avoid behavioural biases (in both yourself and clients), how to extract behavioral insights from the executives of prospective investments, and how manager behaviour can be used to predict future fund performance.
An indispensable tool, Return of the Active Manager rationalises the financial markets and prescribes actionable strategies that build on the lessons of behavioural finance.
About the author
C. Thomas Howard has taught, researched, consulted and invested in stocks for over 40 years. A professor at the University of Denver, Howard has taught stock analysis to audiences ranging from young undergraduates to adult seminar audiences in international classes in Italy and Denmark. A prolific writer, Howard is quoted regularly in Barron's, Money Magazine and other consumer publications.
About the author
Jason A. Voss, CFA, is the CEO of Active Investment Management (AIM) Consulting, a firm dedicated to helping small- and medium-sized active investment managers to deliver alpha for the benefit of their end clients. He is the retired co-portfolio manager of the Davis Appreciation and Income Fund. During his tenure the Fund bested the S&P 500 by 49.1%, was Lipper #1, a Morningstar Analyst Pick, and one of the first ten funds awarded Morningstar’s Stewardship Grade “A.” Jason also served as the Director of Content for CFA Institute, the world’s largest organization of financial professionals. He is a frequent go-to interview for the likes of the Wall Street Journal, Barron’s, Marketplace Morning Report, the BBC’s Today Programme, and many others. Jason earned his BA in Economics and MBA from the University of Colorado at Boulder.
Reviews
“The book “Return of the Active Manager: How to apply behavioral finance to renew and improve investment management,” puts forth fresh ways in which investment managers can use behavioral principles to push the envelope in active portfolio management. Tom and Jason have combined their extensive knowledge and direct experience to create a standout. Managers and advisors should delight in the fact this exceptionally capable duo has written a comprehensive book about behavioral investment management specifically for them.”
If you do not believe in active management, please read this book, it will challenge you to think differently about it. If you are a believer, please read this book, it will provide you with entirely new insights to work with. I just wish this book had been written 20 years ago, I may have had a more successful career in investment management.
Even as a decades-long trend toward passive investing continues without any signs of slowing, mounting evidence shows many active fund managers have superior performance that will likely improve as indexation increases. This book provides the very timely service to readers of synthesizing several of the key insights and findings from this recent evidence and providing actionable principles for identifying profitable investments in the actively-managed fund space.
Advisors – drop everything and read this book!
Voss and Howard shine a practical light on the massive opportunity that exists for truly active fund managers in this day and age – if they are willing to focus on identifying and mitigating their own behavioral biases, in addition to exploiting those of other market participants. It’s a must-read for all next-generation fund managers.
The book offers a convincing alternate view to look at active investment management and is a must for asset owners, irrespective of asset class, and wealth professionals.
Wow! I expected a terrific book from Howard and Voss, but ROAM knocked me back. It’s a once-a-decade genre-defining must-have-on-every-investor’s-bookshelf type of book. Read this and your wealth (and life!) will be wiser and smoother for it.
Media coverage
From Seeking Alpha:
In Return Of the Active Manager, C. Thomas Howard and Jason Apollo Voss make the case that active management may actually be on the verge of a major comeback. As recently as 2009, active mutual funds enjoyed a market share of over 75%, with passive index funds making up less than 25%. In 2018, active… Read more »
From Charles Sizemore:
In Return if the Active Manager, C. Thomas Howard and Jason Apollo Voss make the case that active management may actually be on the verge of a major comeback. As recently as 2009, active mutual funds enjoyed a market share of over 75%, with passive index funds making up less than 25%. In 2018, active… Read more »
From Proactive Advisor Magazine:
The book “Return of the Active Manager: How to apply behavioral finance to renew and improve investment management,” puts forth fresh ways in which investment managers can use behavioral principles to push the envelope in active portfolio management.
Contents
About the Authors
Preface
Introduction
Prologue. How Did We Get Here?
Chapter 1. Behavioral Financial Markets
Chapter 2. Prescriptions for Financial Advisors
Chapter 3. Prescriptions for the Equity Investment Process
Chapter 4. Prescriptions for Fundamental Analysis
Chapter 5. Prescriptions for Manager Search
Chapter 6. Prescriptions for Quantitative Analysis
Chapter 7. Prescriptions for Managing the Active Investment Management Firm
Conclusion
| Published: | 29/10/2019 |
|---|---|
| Edition: | 1st |
| Pages: | 212 |
| Formats: | hardback - ISBN 9780857197634 ebook - ISBN 9780857197641 |
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