Friday, December 27, 2013

Believe Your Eyes, Not Your Brains. Ask Yourself What, Not Why.

Seventeen thousand money managers around the globe pay to use BlackRock’s Aladdin risk assessment platform to manage $15 Trillion.  Therefore, nearly 7% of the world’s $225 Trillion in financial assets are being managed by people who all ponder the markets using the same tools.  As a result, 30,000 of the world’s most significant investment portfolios are kept track of by Aladdin.  And so, by default, any flaws in the system matter to every investor, not just to Aladdin subscribers.
It is my belief that there is no professional out there who truly understands the truckloads of reports and analysis that Aladdin regularly produces.  Certainly there is no way for individual investors to do their own legwork and come up with the equivalent of Aladdin’s risk models, but I submit to you that this should never be our focus.  Instead, let your eyeballs do the work.  What matters most is not why these 17,000 money managers vote with their dollars in a particular manner.  What matters most is that we see where they are deploying their assets and what they are voting for.  Believe your eyes and not your brains.  It’s their gigantic footprints that they leave all over our charts that really matter.

Gatis Roze -  Believe Your Eyes, Not Your Brains Ask Yourself What, Not Why