I recently finished Michael J. Mauboussin's newest book, The Success Factor: Untangling Skill and Luck in Business, Sports, and Investing, and strongly recommend it. He raises a great deal of interesting points, and I hope to interview him for The Journal of...
Performance Perspectives Blog
Thoughts on performance measurement from David Spaulding and other members of our team.

Investment success: skill vs.luck
Belief in small numbers
Nobel prize winner Daniel Kahneman, and his long-time colleague, Amos Tversky (who would have been awarded the Nobel Prize, too, but sadly was deceased at the time the prize was awarded), wrote an article for the Psychological Bulletin in 1971 titled "Belief in...
Outcome oriented / client centered investing
The concept of orienting your investing so that it's geared to the client's requirements is getting more attention of late. P&I had an article on this subject in their November 12, 2012 issue, and Steve Campisi, CFA has addressed this at several...
Valuing a portfolio through a transition
We received an interesting question from a client, which seem appropriate to discuss here:We have an issue where we are going back and forth with our custodian regarding the proper treatment for a transition:Manager B is scheduled to receive assets from Manager A at...

Changes… the 2013 CIPM Principles Curriculum
By now you have heard that the CIPM Program curriculum has been changed - signficantly! So much so that the folks at CFA Institute have taken to calling it "The New CIPM Program!"You may be asking yourself, what *are* the new changes? I will try to give a...
Learning from Cervantes
I am reading, or more correctly, listening to, the classic, Don Quixote, by Miguel de Cervantes. It is a massive work, which rightly deseves the praise it has received. Perhaps not surprisingly, if you've been a reader of my commentary for long, I have found something...
Strategy vs. Tactics: Lessons from a Japanese Market Investor
Frank Sortino, PhD, occasionally tells the following story:There was a pension plan that was looking for a Japanese market investor. They found one who had superior performance. Unfortunately, he also had a high tracking error. When their concerns were presented, the...
An example of why we don’t annualize for periods less than a year
This weekend's WSJ reports that "U.S. stocks ended the first week of 2013 up 3.8%." Some might want to annualize this figure, to get a sense of what the year will look like. To do so, we can simply raise 1.038 to the 52nd power, and subtract one.And when we do this we...

Are GIPS verifiers required to search for fraud?
Over the past few years there have been at least two lawsuits filed, where an asset manager had committed fraud, either with a Ponzi scheme or some other means, and where the firm had claimed compliance with GIPS(R) (Global Investment Performance Standards). When...

Should there be a minimum number of months to calculate standard deviation?
You're probably familiar with the expression "just because you can do something, doesn't mean you should." There have been several times where this saying has come in handy, and this post deals with one more case: standard deviation.In performance measurement we can...