Simple but Not Easy: An Autobiographical and Biased Book About Investing

by Richard Oldfield

Described by the author as ""a slightly autobiographical and heavily biased book about investing,"" Simple But Not Easy has plenty of interest to the experienced professional, and is aimed also at the interested amateur investor. The theme of the book is that investment is simpler than non-professionals think it is in that the rudiments can be expressed in ordinary English, and picked up by anybody. It is not a science. But investment is also difficult. People on the outside tend to think that anyone on the inside should be able to do better than the market indices. This is not so. Picking the managers who are likely to do better is a challenge. Richard Oldfield begins with a candid confession of some of his worst mistakes and what they have taught him. He discusses the different types of investment, why fees matter, and the importance of measuring performance properly. He also outlines what to look for, and what not to look for in an investment manager, when to fire a manager, and h

Genres: Finance, Business, Biography

168 pages, Hardcover

First published May 1, 2007

Reviews

[InvestingByTheBooks.com · Rating 5 out of 5]

Simple But Not Easy might very well be the best book written by a practitioner that you ́ve never heard of. It certainly competes very well with the likes of the more widely acclaimed Investing Against The Tide (Anthony Bolton) and The Dhandoo Investor (Mohnish Pabrai). In certain aspects, I would even be so daring as to suggest that time will put it in the same vicinity as the cult-laden One Up On Wall Street (Peter Lynch). The problem with such a comparison is, of course, the constant advancement of things. In the same way that comparing which is the better player of John McEnroe and Roger Federer is utterly meaningless, One Up... was certainly a better book of its time. One of the great findings in Lynch ́s book was that he kept a list of “hundreds of corporations” that he would pounce on, would they reach a low enough p/e valuation. That is a bare minimum requirement in today ́s hyper-competitive world. The very term “Simple But Not Easy” is one of my absolute favourites from the fully stocked library of Warren Buffett quotes, as it encompasses so many complexities hidden within a mere playing with words. So this book literally had me at hello.

Within the field of financial literature, it is often opined that books by practitioners carry more weight than those by academics. I have never quite settled with this blunt way of classifying literature; surely a book should not be judged by (the name on) its cover, but rather by its insights and content? In this particular instance, however, I am inclined to agree. The book is immensely aided by the virtue of Oldfield ́s wide array of positions as an investor over the last couple of decades. Most notoriously, he was the head of the Hans Rausing family office while practicing value investing at his own firm Oldfield Partners. It is obvious that Oldfield had stored up a lot of prejudices about the investment industry that he wanted to get off his chest. And the book has greatly benefited from the fact that it was written and re-written over the course of more than two years. Simple But Not Easy starts rather unconventionally as Oldfield talks about his mistakes first. Among these are; “Travel Narrows The Mind”, “Ethics Matter” and “Avoid Large Dogmatic Views”. These errors, as is the case for the entire book, are brim-filled with specific examples, anecdotes and actual illustratory events from Oldfield ́s career as a stock-picker. The discussion around the investment industry ́s peculiar mistake-led reality is key. What is different with investing, visavi almost any other profession, is that mistakes are such an integral part of the outcome itself, that they should also have bearings on the processes and decisions. If you are the postman in your area, you probably have a 99,9 per cent success rate. A top notch investor? How about 60 per cent? The investors who know they ́re going to be wrong repeatedly, and therefore proceed to invest along the lines of probabilities instead of firmly believing every single idea will knock the ball out of the park definitely have a head start.

Patience literally being the art of suffering is also a part that ought to be put in the memory bank, as is the chapter about “What to look for in a manager” (Oldfield has also chaired the Oxford University investment committee). The importance of convictions as part of successful portfolio management, I would personally put on “Top 3 Beliefs About Investing”. Convictions are your best friend when the going gets tough, they allow for a concentrated portfolio, they focus the mind and they stiff-arm most people ́s heavy action bias. Simply put, if you don ́t stand for something, you will fall for anything. And a gullible, trend-following investor is not a good investor. Instead, have well thought-out beliefs, bring out your inner calmness (how many frenzied, great investors have you met?) and remember to stay humble. Much too brilliant people tend to become to dogmatic, which often leads to one-decision portfolios.

If you are a relative newcomer to investing, read this book for the great narrative of a career in portfolio management. For the more seasoned investor – after you’ve overcome that “it should have been me- feeling” – read it so that all those valuable insights are actually stored in the investing-part of your brain, and for the lessons to be learned from the Russia vs Coke-incident.

[Tirath · Rating 2 out of 5]

Was interesting in the first few pages and then became a humdrum about investment managers, and the fund management industry and society.

Not worth an investor's time.

[JC · Rating 4 out of 5]

A lot of wisdom (and humour) in these pages from this old hand. Oldfield's experience is long and varied and while the book is probably more intended for those less experienced in the industry, there is still something for everyone. My personal favorite is the first chapter on howlers. Not easy for most managers to talk about their mistakes but Oldfield is brutally honest with himself.

A few good excerpts below.

Prescient:
"One of the factors which prompted our firm to sell Renault shares in 2006 and to buy (more) Microsoft was the market’s reverential attitude to Carlos Ghosn, the chairman of Renault, and its suspicion by contrast of anything which the Microsoft management dreamed up. Carlos Ghosn had worked miracles at Nissan in Japan before he returned to Paris to lead Renault (which owns 44% of Nissan). In the market’s eyes he could do no wrong. Bill Gates and Steve Ballmer at Microsoft could do no right. Premature beatification of chief executives is a condition to be wary of."

Yup:
"Investment management is not a 9 to 5 job. The business of investment goes on, in a manager’s mind, most of the time, though often in the background rather than in the foreground." 

"One of the oddities of the investment world is that it is, along with politics, perhaps the only profession where at most times of the waking day those engaged in it are thinking about some aspect of their professional life."

[Ben · Rating 3 out of 5]

3.5 stars
It spends a bit too much time on fund managers and somehow repeatedly stating, that a manager's past performance can be ignored, as they don't indicated future performance... would the author say that about Buffett, Lynch or Greenblatt?

There are plenty of worthwhile sentences that I highlighted though.

[Sharad Ramnarayanan · Rating 4 out of 5]

What I liked about the book is it is straight from the heart. It is the authors experience that is reflected in the book and the content is very original. However as a reader my takeaways are limited as the bulk of the book is about selecting the right fund manager which is not very relevant to me at least.

[Max Ohnesorge · Rating 4 out of 5]

Witty and straightforward. I wish I had read this earlier as it would be good foundational info. A little outdated but much of the advice still rings true in my opinion.

[Theo Kokonas · Rating 4 out of 5]

I enjoyed this book. It was written by a former investment banker who was in the game for a few decades. It may not be as timely as some more recent books but it gives a great snapshot of investment banking from a few years previously.
It's worth a read for anyone who maintains their own investment portfolio to get an insider's view on fund management (or at least how it used to be).

[Harsh Thaker · Rating 4 out of 5]

Funny and Satire take on the world of investment management

[Max Rose · Rating 3 out of 5]

Good background on fund management, hedge funds, benchmarks and a good dose of common sense on investing.

[Sy. C · Rating 4 out of 5]

A compendium of useful, though not groundbreaking, insights about investing as well as selecting fund managers.