Comment: Friedrich Nietzsche, Fund Boutiques, and the “Truth”

“What is the truth? A flexible army of metaphors. There are no facts, just interpretations.” (Friedrich Nietzsche)

Perhaps it is a daring statement by Friedrich Nietzsche, but perhaps it is, occasionally, also a status description of the areas of investment market projection or portfolio management. Those people, who label the study of national economics as a “pseudo science,” point toward the financial market crisis and the significance or non-significance of investment market projections.

The Golden Mean – Not Always the Wrong Approach

Realistic expectations can do wonders at times. Between damnation of investment market projections or market assessments in the area of portfolio management and indiscriminating faith, other points of view exist. As much as the banker is not the guarantor for the outperformance of all client portfolios, the projecting analyst is not the keeper of the truth and wisdom grail either. Both professions know their trade, methods, and utilize particular “thought constructions” – no more, no less. Constructively viewed, enlightenment, risk management, and asking the right questions could be a demand for the profession. And, of course, there are good bankers and good financial analysts, despite all the bad press.

Frankfurt Impressions – Round Table and Presentations

What can lower expectations of financial analysis and portfolio management lead to? The institutional investor, for example, may lose his or her illusion that a third party’s assessment and projections can actually replace his or her own investment decision-making process: decision making, defining asset allocation, and developing one’s own (!) market prognosis. Based on personal experience with panel discussions, presentations, and based on direct “project exchange of thoughts” with investors, it is amazing that many market participants increasingly realize the value of “research,” market projections, and trend analysis of independent asset managers.

Fund boutiques private label fund initiators of investment companies such as Universal Investment, Hauck & Aufhäuser, IPConcept and many others will have to face this challenge. Next to the performance criterion, an interest in alternative sources of investment market observation exists for investors. Creativity is called for; know-how adds to customer retention; opinions are important: “Where nothing is true, anything goes” (Friedrich Nietzsche).


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