It’s an interesting question. In his excellent book, A Short History of Financial Euphoria, economist John Kenneth Galbraith writes:
Finally and more specifically, we compulsively associate unusual intelligence with the leadership of the great financial institutions – the large banking, investment banking, insurance and brokerage houses. The larger the capital assets and income flow controlled, the deeper the presumed financial, economic and social perception.
In practice, the individual or individuals at the top of these institutions are often there because, as happens regularly in great organizations, theirs was mentally the most predictable and, in consequence, bureaucratically the least inimical of the contending talent. He, she or they are then endowed with the authority that encourages acquiescence from their subordinates and applause from their acolytes and that excludes adverse opinion or criticism. They are thus admirably protected in what may be a serious commitment to error.
What do you, my readers think? Is it true that boring, predictable and safe wins?
If it is true, then how do we reconcile this with the observation of John Maynard Keynes that the best long-term investors usually appear to be “eccentric, unconventional and rash in the eyes of average opinion“?
I think these are interesting questions. I look forward to reading your comments (if you dare)!