Neil Woodford – What a Surprise!

Reading of the demise of renowned fund manager Neil Woodford, I was reminded of my deep capacity for destructive cynicism.

The fellow had had a good run for many years but like all gurus, investment or otherwise, he eventually proved to have feet of clay like the rest of us.

But cynicism and its close relative schadenfreude are undoubtedly not the correct way to “greet” the news.

Cynicism seems to be one of my default settings and it is not a healthy one. It strikes most vehemently after a bad night’s sleep when I am feeling (just for a change) irritable and grumpy.

It is my view that active fund managers succeed more by luck than skill (however intelligent they may be, or otherwise). They also prosper by good marketing. Fund managers are by definition “Andy Average” and the stars, over the long term, revert to the mean.

While that may be true, the correct response to such a decline such as that suffered by this long successful manager should be quiet understanding of the laws of the market which humble us all eventually.

My natural temptation on bad hair days is to crow. To say “I told you so”. But this is not helpful. He, along with all the other fallen stars, have presumably done a good and honest job as stewards of our pensions and savings over many years.

It is entirely our own fault, not his, if we believed the hype which inevitably follows such people on their rise towards what (inevitably) turns out to be their zenith. If we were so convinced that such stars are eventually pulled by gravity to their nadir then so be it, we were right all along. But so what?

If we believe in fairy tales we will eventually be disappointed, but we have to believe in something or we will not get through the day, let alone life.

Cynicism is such an easy and yet self destructive trap to fall into.

Instead of commenting on such things (or even noticing their occurrence) we should be quietly promoting views which we consider to be more appropriate.

To concentrate on the positive and to ignore the negative.

This post is not intended to be about my investment views. But I should concentrate on the positive; I should tell people about what I consider the “correct” and more durable approach to investing.

Negativity serves no purpose whatsoever.

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