Even though potentially a product of some cognitive bias, but it does appear to me that 2019 was an especially memorable year, containing a larger than usual number of really big finance-related highlights.
I think it’s because these highlights were not just about 2019, but about the trends that have shaped the past ten years, peaking in 2019, as if putting an exclamation point to close the decade.
This is by far not an objective list but more of a ‘personal journal entry’ for the themes to remember from this year, related to what we care about at Two Centuries Investments.
Passive overtakes Active (here)
Value and factor investing goes wild again (here)
Not having an opinion on ESG is no longer an option (here)
No recession surprise, twice (here)
Market melt-up is on its way (here)
Interest rate & inflation surprises (here)
Alternative Data takes hold (here)
Machine Learning start ups proliferate (here)
Share-buybacks dominate (here)
Asset Management in need of major innovation (here)
Long-Run factor studies peaked (here)
Intangible Assets make up 84% of company’s valuations (here)
Quantamental investing is on the rise (here)
Hedge Funds and other Diversifiers underperform (here)
We can finally read about the most successful and the least known about quant - Jim Simons (here)!
If history is any guide, we can’t use the trends of the past decade to predict the next. 2020’s will likely look and feel very different from 2010’s. Some changes will come slowly, others more quickly. At the same time, human nature remains more or less the same, so the way we will respond to the coming changes and surprises will likely be very similar to how we responded to the changes and surprises of the past decade. Hence reviewing the list above and thinking about our under-reactions, over-reactions, accurate-assessments and false-predictions can help us grow wiser.