The world of investing is full of excuses. For proof, just thumb through any fund’s back catalogue of newsletters. You’ll find lots of neatly argued ex post facto explanations for why things didn’t go to plan.
Although investors should always try to practice humility, we are all primed to deflect, to argue we were wrong for the right reasons, a bit too early in our judgements, or victims of market irrationality, oversight, or myopia. Professionals may be especially prone to this tendency. When your career relies on projecting credibility and authority, it can be hard to acknowledge overconfidence or the times when you simply messed up.
Since taking on our quarterly No-Thought Portfolio last year, I have not tried to make excuses for its mediocre performance. In truth, lots of the stock screens that appear in these pages have struggled since markets turned at the end of 2021. And when lined up against the benchmark from which it draws its picks, the FTSE 350, the No-Thought isn’t miles off the pace. Over two years, it is even ahead by 3.6 percentage points.