Dr. Gawande tells the story of rock band Van Halen who buried a clause in its lengthy touring contract that a bowl of M&Ms was to be provided backstage with the brown M&Ms removed. When the group arrived with its nine truckloads of heavy equipment, the appearance of the bowl of M&Ms – the brown ones removed – was a sign that the rest of the venue’s preparations were likely correct. If not, they knew that all of the other preparations were suspect – including whether the stage would support the weight of their equipment.
What does all this mean to you? When trusting a manager to invest your money, be sure this person is a compentent, well-degreed professional that realizes that shortcuts to research only puts you further behind. Digging to the financials of a company or reviewing key ratios in researching mutual funds is key to investment returns. Ask the right questions when hiring a money manager. One important question would be “do you use checklists”. Well documented step-by-step procedures can eliminate errors in your account, and can ultimately lead to better portfolio management and a much better relationship with your porfolio manager.
Photo by Cameron Cassan
