For most fund managers there is nothing more important than adopting a long-term approach. This enables them to insulate themselves from the noise and random fluctuations of financial markets, and hopefully exploit them. Yet for many this is simply not possible. Perverse and misaligned incentives, the desire to measure everything over meaningless time periods and the ascendancy of outcomes over process mean that the long-term is nothing more than a collection of reporting months and quarters. Even when a fund manager’s express intention is to operate with a long time horizon, often they cannot because it is decided by the behaviour of other people. They don’t get to choose.
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