The next book on my summer reading list is The Great Reflation, by Tony Boeckh. Boeckh is the president of Boeckh Investments, Inc., and was the chairman and editor-in-chief of BCA Publications, publisher of the Bank Credit Analyst, from 1968 until 2002. Boeckh was largely responsible for building BCA into the globally respected independent research company it is today. We are long-time subscribers. My Baltimore to LA to Fresno to Visalia and back travel schedule last week gave me a good head start on reading Boeckh’s book and I expect to be writing my review of it for you by next week or so. However, there is one paragraph in the introduction that is so brilliant that I had to share it now. Here is what Boeckh has to say about the investment process:
“A framework of analysis for understanding markets is not the same as building a model or set of indicators fitted to back data. I can assure you, from a lot of experience, that they always break down. An eclectic approach that is based on common sense, strong logic, and objective data, balanced by right-brain intuition and lots of curiosity, is what works best. The investment world will never be deterministic, never amenable to scientific models, at least for any period of time. Some approaches work well in some periods, other approaches in other periods. Successful investors not only know how to think outside the box but, from experience, know what to pay attention to in each market environment.”
I’ve read this paragraph four or five different times and I suggest you do the same. I’ve typed it twice (because I didn’t properly save this blog post the first time I wrote it). I intend to have it set to music. I’m hiring a rap artist to “rap” it for younger financial professionals. I’m going to find an artist to sculpt this quote in metal and in stone, and I’m having it burned into wood. There are times when writing a blog post is difficult, and there are times when they seem to write themselves. But this time Boeckh wrote it for me. I can’t imagine a clearer statement of our philosophy of money management at Pinnacle than this one. We try to remember that “successful investors not only know how to think outside the box but, from experience, know what to pay attention to in each market environment.” This is a particularly difficult market environment and we continue to invest our managed accounts using “an eclectic approach based on common sense and right brained intuition.” It’s unfortunate that it is impossible for the rest of Boeckh’s book to be as perfect as this paragraph. I wish that I had said it myself.
