- Simon Hallett — the co-chief investment officer at Harding Loevner — strategically makes sure his office is devoid of anything that might encourage flawed short-term thinking.
- His firm takes a long-term disciplined approach to investing and puts an emphasis on behavior.
- Hallett shared his favorite books and podcasts that he finds particularly insightful today.
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Simon Hallett, the partner and co-chief investment officer of Harding Loevner, isn’t your average money manager.
He’s not concerned with en vogue trading strategies, the next hot stock, or trending topics on the Bloomberg terminal. His focus is on the long term — and he practices what he preaches. His firm has held Nestle in their portfolio for over 30 years.
“We don’t keep Bloomberg machines around the office; we have two,” he said on “The Meb Faber Show,” an investing podcast. “We defend ourselves by not having CNBC on in the office.”
Hallett’s incessant focus on long-term investing renders the tools that most money managers view as nonnegotiable into glorified paper weights and financial theater. He doesn’t need constant updates on price or the latest prognostications. There’s a high probability that that information isn’t going to affect his decision-making.
“Short-term performance is driven by luck, not skill,” Hallett said. “The trouble is that this industry is one where a lot of the incentives are about transactional activity and very few incentives just to be long-term holders.”
Hallett draws attention to a common investment fallacy. Oftentimes, investors feel like they should be doing something. However, that impulse can lead to an emotional and biased decision. That’s why Hallett says the ability to withstand a call to action from market commentators is an advantage that is “very, very powerful.”
Warren Buffett, arguably the most famous investor, summarized Hallett’s overarching message perfectly with a baseball analogy.
“The trick in investing is just to sit there and watch pitch after pitch go by and wait for the one right in your sweet spot,” Buffett said. “And if people are yelling, ‘Swing, you bum!,’ ignore them.”
Throughout his journey as a money manager, Hallett has borrowed mantras and ideas from an array of sources and applied them to his own investment strategy.
Here are some of the books and podcasts he finds particularly insightful today.
“I’ve mentioned Michael Mauboussin and can’t praise him enough,” he said. “If you read his four books, I think you’ll get a step-to-step guide on how to run an investment process.”
For the uninitiated, Mauboussin is the author of “The Success Equation,” “Expectations Investing,” “More Than You Know,” and “Think Twice.” He’s the director of research at BlueMountain Capital Management.
In addition to Mauboussin’s work, Hallett suggests “Thinking Fast and Slow” by Daniel Kahneman and “The Intelligent Investor” by Benjamin Graham. The works of Keith Stanovich and Jim Ware also top his list of recommendations.
“I like to listen to podcasts,” he said. “I think that if you’re doing an activity that takes up a certain part of your bandwidth, you can then fill the rest of it, and your attention doesn’t wander.”
Hallett does most of his podcast listening while he’s commuting to and from the office. He finds that he retains more information that way because of his “bandwidth” philosophy mentioned above.
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