That paves the way for a genuine commitment to change. A 360-degree assessment is a wake-up call for most alphas, providing undeniable proof that their behavior doesn’t work nearly as well as they think it does. Coaches get the alpha’s attention by inundating him with data from 360-degree feedback presented in ways he will find compelling-both hard-boiled metrics and vivid verbatim comments from colleagues about his strengths and weaknesses. That’s why alphas need coaching to broaden their interpersonal tool kits while preserving their strengths.ĭrawing from their experience coaching more than 1,000 senior executives, the authors outline an approach tailored specifically for the alpha. Their unemotional style can keep them from inspiring their teams. Their high expectations can make them excessively critical. Their self-confidence can appear domineering. But many of their quintessential strengths can also make alphas difficult to work with. Natural leaders, they willingly take on levels of responsibility most rational people would find overwhelming. Unfortunately, for the last 15 years I didn't and my kids will pay a price for it.Highly intelligent, confident, and successful, alpha males represent about 70% of all senior executives. The bottomline is that for a US based investor, international investing provides no significant benefit other than as a source of alpha. While this may be the absolute worst time to effectuate this change, this is the most appropriate time to think about the change, so that you can make the change at a more opportune time. In that framework, the international allocation has to be closer to 10-15% at most as opposed to 30% based on market weight based schemes like ACWI. And, therefore, pick the right managers and size it accordingly. The right way to think about your international allocation is as a source of alpha. International beta in your portfolio is no better than US beta, actually worse. And that is likely to be the case irrespective of what Zoltan Pozsar has to say. The driver is not not that hard to decipher: In a dollarized world.like it or not, this is where we are.US driven flows overwhelm anything else. And they are unlikely to anytime soon.Īnd, for a personal investor, I know more about it than most as I rebalanced my personal equity allocation to 30% international on a disciplined basis. The entire opportunity set for a US based investor has been effectively dollarized in the sense that dollar based flows are overwhelming and matter more than anything else and thus the benefits of international investing have been non-existent for a while, actually for a very long while.īut we still persist, thinking somehow things will change, due to valuations, different economic drivers, etc etc.īut they haven't. When Barton Biggs started proclaiming the benefits of international investing in the 80s and 90s, he was making a very good point. Take a look.Īnd it is true even after the current correction in US equities. Credit Suisse publishes an annual report with all the data you need. And that has happened for more than a few decades. This one simple asset allocation decision has caused more detraction in value than anything else.įor a US based investor, Global investing has not added any value either in added returns, diversification or lower overall volatility. It is Global Investing for a US based investor. However, something else has caused more pain for US based institutional and individual investors than Fed missing out on inflation, ponzi schemes in Crypto and the post-pandemic runup in Tech.and I bet you don't even know about it. And there will be more such flavors over the next few quarters. In case you didn't know, LUNA blew up and has caused all kinds of pain.
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