Hubris and the City. (2014) Should investors seek ways to identify hubris?

“..the problem (of hubris) seems to be so widespread that it raises a bigger question: namely, should investors in funds (or directors of financial institutions) now be looking for a systematic way of spotting this trait? And trying to intervene before it is too late?

Gillian Tett
FT magazine 3 October 2014

“Last month, the financial world was shocked to learn that Bill Gross, the legendary investor known as the “bond king”, was parting company with Pimco, the $2tn asset management group that he co-founded four decades ago.

“His departure was acrimonious and there has been a flurry of debate about how Gross’s once-stunning investment performance has deteriorated in recent years. But, to my mind, what is equally fascinating is the narrative about Gross’s behaviour. In the view of some of his former colleagues (whose stories are remarkably consistent), Gross became increasingly “erratic” in recent years. More specifically, the colleagues reckon that he became prone to arrogance and paranoia, unwilling to listen or accept criticism – or let others make decisions. It is, in short, a classic description of hubris, on a striking scale…

“..the problem seems to be so widespread that it raises a bigger question: namely, should investors in funds (or directors of financial institutions) now be looking for a systematic way of spotting this trait? And trying to intervene before it is too late?”

Access the full article here: Hubris and the City