I will ignore the somewhat silly premise of the book which was to analyze the emotional nature of “money managers” and thus glean some clues as to how to prevent future financial crashes. But I would note the following:

1. If this is what passes for money management in the UK, they have a terrible problem.
2. The structure of money management firms and their relationship with clients is almost always an enemy to actually achieving client goals.
3. Don’t check short term performance, particularly…hourly!
4. There is an overwhelming tendency to allow price changes to create emotions—up and down. If you don’t have a process that enables you to create “foundational thought” you doom yourself to failure as you get shaken out with every minor price tick.
5. In a world with this much algorithmic trading, I would argue that “the price is telling you something” is a lot less valid than it was x generations ago.
6. In a survey of stocks bought, the following were commonly listed highly as reasons for purchase:

   • 75% – “Truth seen through exceptional ability and effort.”
   • 40% – “An exceptional company.”
   • 40% – “Limited opportunity for negative surprises.”
   • 25% – “Management.”
7. In an analysis of mistakes, “blame management” is the over-riding winner.

   • Like marriage, it’s always easier to blame someone else.
   • We often don’t recognize that management’s job is hard, and stuff gets in the way of their path toward greatness that could be classified as unforeseen.
   • We also forget that management is highly incented to BS us and corporate BS has become a highly sophisticated and competitive game.
8. “Buying a stock is like getting married to someone who we cannot see or meet because they are far away and we receive only sporadic and vague details about their behavior.” It is easy to be spooked by seemingly minor news.
9. How much “new news” is either “unimaginable or unanticipated,” or did we have a process failure and thus “failed to imagine.”

I conclude with the following: “If the future is uncertain, information flow is overwhelming, and we admit that there is only a small probability that “we” are part of the truly exceptional, then what is a rational plan?

1. Set up a process that helps to limit making terrible mistakes.
2. Work hard and be thorough—know the known unknowns.
3. Create process to limit “failure to imagine” mistakes.
4. Use position sizing and leverage avoidance to remain standing when the truly unimaginable does rear itself.
5. Fish in the better fishing holes and really hard to avoid known potholes—like E+P, fashion retail, commodities.