The Value Perspective

In this episode, Juan and Andy speak with Taylor Pearson, a fund manager with a particular interest in creating research-backed systems to make decisions in an uncertain world, thus making people more ‘antifragile’. One of these systems included ergodicity which can be explained as a scenario where the average outcome of the group is the same as the average outcome of the individual over time. An example of an ergodic systems would be the outcomes of a coin toss (heads/tails). If 100 people flip a coin once or 1 person flips a coin 100 times, you get the same outcome. Taylor discusses how this theory can help people make decisions in uncertain environments.   Minutes: 01:10 Intro to Taylor  01:35 Notable days in history and their volatility 03:59 How do you define risk? 05:43 What is ergodicity? 08:23 Where is ergodicity relevant in our everyday life? 16:42 What is the best advice to give someone who may be succumbing to non-ergodic systems? 18:53 How does ergodicity apply in stock market scenarios? 23:53 How does diversification play a part? 26:25 Does diversification need to be oppositional? 29:52 How do you communicate probability in a way clients easily understand? 31:45 The Kelly Criterion: utilising a theory to size your decisions 34:36 An example of a bad decision 36:08 Book Recommendations – The Three Body Problem by Liu Cixin and The Origins of Political Order by Francis Fukuyama NEW EPISODES: You can subscribe via Podbean or use this feed URL (https://tvpschroders.podbean.com/feed.xml) in Apple Podcasts, Spotify, and other podcast players.   GET IN TOUCH: send us a tweet: @TheValueTeam    Important information. This podcast is for investment professionals only. This information is not an offer, solicitation or recommendation to buy or sell any financial instrument or to adopt any investment strategy. Any data has been sourced by us and is provided without any warranties of any kind. It should be independently verified before further publication or use. Third party data is owned or licenced by the data provider and may not be reproduced, extracted or used for any other purpose without the data provider’s consent. Neither we, nor the data provider, will have any liability in connection with the third party data. Reliance should not be placed on any views or information in the material when taking individual investment and/or strategic decisions. Any references to securities, sectors, regions and/or countries are for illustrative purposes only. The views and opinions contained herein are those of individual to whom they are attributed, and may not necessarily represent views expressed or reflected in other communications, strategies or funds. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall. Past Performance is not a guide to future performance and may not be repeated. The forecasts included should not be relied upon, are not guaranteed and are provided only as at the date of issue. Our forecasts are based on our own assumptions which may change.  

Juan and Andrew met with Sean Sutcliffe, the CEO of Oxford Space Systems, to learn how he deals with uncertainty not only in a start up business but also in a complex environment like space.  RUNNING ORDER: 01:12 Introduction 01:47 How does uncertainty impact a space start up? 03:41 Balancing market and technical uncertainties 05:33 Start-ups vs incumbents: Finding success through exploiting niches 08:14 How do you instil patience in investors over long timelines in a short-term focus environment? 12:30 Utilising milestones to help investors understand the component of time. 14:15 How the scientific approach to engineering testing aligns with market testing 17:49 Coping with failure and unexpected surprises 20:21 Understanding when you need to make a change in direction 24:33 Removing bias from investment cases – the human element in company management 26:51 When a good decision has a bad outcome 29:16 How do you build a successful team? 32:07 Book recommendation   NEW EPISODES: You can subscribe via Podbean or use this feed URL (https://tvpschroders.podbean.com/feed.xml) in Apple Podcasts, Spotify, and other podcast players.   GET IN TOUCH: send us a tweet: @TheValueTeam    Important information. This podcast is for investment professionals only. This information is not an offer, solicitation or recommendation to buy or sell any financial instrument or to adopt any investment strategy. Any data has been sourced by us and is provided without any warranties of any kind. It should be independently verified before further publication or use. Third party data is owned or licenced by the data provider and may not be reproduced, extracted or used for any other purpose without the data provider’s consent. Neither we, nor the data provider, will have any liability in connection with the third party data. Reliance should not be placed on any views or information in the material when taking individual investment and/or strategic decisions. Any references to securities, sectors, regions and/or countries are for illustrative purposes only. The views and opinions contained herein are those of individual to whom they are attributed, and may not necessarily represent views expressed or reflected in other communications, strategies or funds. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall. Past Performance is not a guide to future performance and may not be repeated. The forecasts included should not be relied upon, are not guaranteed and are provided only as at the date of issue. Our forecasts are based on our own assumptions which may change.

This week Nick and Juan meet Maj Nics Wetherill and LSgt Sophie Montagne, members of the Ice Maiden Expedition, the first all-female team to ski coast-to-coast across Antarctica by muscle power alone, to discuss making risk decisions as a team in the most extreme of environments.   RUNNING ORDER: 01:00 Introduction 03:20 How do you assemble a team? 08:00 Identifying what characteristics make for a strong, cohesive team in difficult conditions 10:45 The ‘human element’ versus technical skills 13:20 Learning to lead from other’s failures 15:47 Utilising outside perspectives to review planning 17:36 How do you build a process to prepare for the unknown? 20:08 How did you decide on roles within the team? 23:56 The decision framework within a democratic team 26:25 Preparing for and dealing with uncontrollable factors 30:32 How to weigh risk against reward 32:20 Ensuring that all team members are equipped mentally and physically 35:57 Key takeaways   NEW EPISODES: You can subscribe via Podbean or use this feed URL (https://tvpschroders.podbean.com/feed.xml) in Apple Podcasts, Spotify, and other podcast players.   GET IN TOUCH: send us a tweet: @TheValueTeam    Important information. This podcast is for investment professionals only. This information is not an offer, solicitation or recommendation to buy or sell any financial instrument or to adopt any investment strategy. Any data has been sourced by us and is provided without any warranties of any kind. It should be independently verified before further publication or use. Third party data is owned or licenced by the data provider and may not be reproduced, extracted or used for any other purpose without the data provider’s consent. Neither we, nor the data provider, will have any liability in connection with the third party data. Reliance should not be placed on any views or information in the material when taking individual investment and/or strategic decisions. Any references to securities, sectors, regions and/or countries are for illustrative purposes only. The views and opinions contained herein are those of individual to whom they are attributed, and may not necessarily represent views expressed or reflected in other communications, strategies or funds. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall. Past Performance is not a guide to future performance and may not be repeated. The forecasts included should not be relied upon, are not guaranteed and are provided only as at the date of issue. Our forecasts are based on our own assumptions which may change.

In this episode, we have the opportunity to sit down with Hector Ibarra, the CEO of Global Parametrics. Hector has worked for over 20 years in innovating the financial industry's approach to disaster risk financing products. We discuss how his company creates products that help people hedge their risks against natural disasters and increase their chances of survival. RUNNING ORDER: 00:52   Introduction 01:57   What are parametrics? 03:37   Hedging products vs. Insurance products 06:55   How do you define and quantify risk in an environment where there is little data? 09:54   Pricing in the unknown 11:53   The human dimension in Emerging Markets: how to approach risk when in survival mode 14:18   Acknowledging the systemic risk of climate change 16:26   Short term memory: telling the complex story of climate change to a global audience 19:22   Working with the scientific community to inform your decisions 20:58   Contextualising risk and probabilities through art and games 24:07   How do you communicate risk to clients? 26:20   Creating scenarios when working with catastrophes 27:52   The importance of ESG investing for emerging markets NEW EPISODES: You can subscribe via Podbean or use this feed URL (https://tvpschroders.podbean.com/feed.xml) in Apple Podcasts and other podcast players. GET IN TOUCH: send us a tweet: @TheValueTeam  Important information. This podcast is for investment professionals only. This information is not an offer, solicitation or recommendation to buy or sell any financial instrument or to adopt any investment strategy. Any data has been sourced by us and is provided without any warranties of any kind. It should be independently verified before further publication or use. Third party data is owned or licenced by the data provider and may not be reproduced, extracted or used for any other purpose without the data provider’s consent. Neither we, nor the data provider, will have any liability in connection with the third party data. Reliance should not be placed on any views or information in the material when taking individual investment and/or strategic decisions. Any references to securities, sectors, regions and/or countries are for illustrative purposes only. The views and opinions contained herein are those of individual to whom they are attributed, and may not necessarily represent views expressed or reflected in other communications, strategies or funds. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall. Past Performance is not a guide to future performance and may not be repeated. The forecasts included should not be relied upon, are not guaranteed and are provided only as at the date of issue. Our forecasts are based on our own assumptions which may change.

The Value Perspective team sit down with former professional poker player and author of Thinking Bets, Annie Duke to discuss probabilistic thinking, base rates, and outcome focus thinking.  RUNNING ORDER: 01:26 Why thinking probabilistically is helpful in decision making 03:30 How do we scale probabilistic thinking in line with more complex situations? 08:30 Working with incomplete information  10:46 How to utilise reference classes to sharpen your probabilistic thinking 13:30 Using outside perspectives to test your thinking 19:00 What is tilt and how do we overcome it? 31:23 How are you focusing on decision quality? 41:57 Working with longer time frames when assessing decisions NEW EPISODES: You can subscribe via Podbean or use this feed URL (https://feed.podbean.com/schroderstvp/feed.xml) in Apple Podcasts and other podcast players. GET IN TOUCH: send us a tweet: @TheValueTeam    Important information. This podcast is for investment professionals only. This information is not an offer, solicitation or recommendation to buy or sell any financial instrument or to adopt any investment strategy. Any data has been sourced by us and is provided without any warranties of any kind. It should be independently verified before further publication or use. Third party data is owned or licenced by the data provider and may not be reproduced, extracted or used for any other purpose without the data provider’s consent. Neither we, nor the data provider, will have any liability in connection with the third party data. Reliance should not be placed on any views or information in the material when taking individual investment and/or strategic decisions. Any references to securities, sectors, regions and/or countries are for illustrative purposes only. The views and opinions contained herein are those of individual to whom they are attributed, and may not necessarily represent views expressed or reflected in other communications, strategies or funds. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall. Past Performance is not a guide to future performance and may not be repeated. The forecasts included should not be relied upon, are not guaranteed and are provided only as at the date of issue. Our forecasts are based on our own assumptions which may change.