As an investment manager, “What do you actually do all day?” is a question I’m often asked. Occasionally, the question comes from people in the industry.
Read and think.
Recently, I decided to look at this question more “scientifically” by keeping a journal of my work days for one week. Looking at the resulting chart, below, I realize I need to change my answer. What do I do all day? Read, think and talk.
Here are a few observations that came out of my mini-journaling experiment:
Visitors to the Trimark Investments office usually experience a library atmosphere – that distinctive hush that exists when people are absorbed by their work. However, and this might not come as a surprise to others, it turns out I talk a lot more during the day than I thought. This reflects the joy and clarity I get from talking through ideas.
During the week, I noted discussions and debates with my colleagues Albert, Rob, Virginia, Norm, Jeff, Erin, Ian, Mark and Eric. I am struck by how lucky I am to work with a smart, passionate and diverse group of people. The benefit of this open and collegial environment is immeasurable. We all share the same skeptical mindset and desire to challenge conventional wisdom.
New ideas vs. companies owned
I’ve always said that I split my time 60:40 between new ideas and currently-owned companies. The info I collected shows I spend closer to two-thirds of my day on new ideas. This, I believe, is one of the great advantages of a concentrated portfolio. I am able to spend a lot of time looking at new ideas – even during earnings season.
Focus on the portfolios
My week didn’t include a lot of internal meetings. A lot of informal debate yes, but without getting bogged down in lengthy formal meetings.
I try and minimize any activities not related to the portfolios. Administrative tasks took up less than one per cent of my days. One of the great benefits of working for a large, global company is that we have a strong team that allows me to focus on managing the portfolios, while others take care of the work in their areas of expertise. I am thankful for this situation.
Most research I do on companies is my own work. Over time, I’ve found sell-side analysis less and less valuable. This is especially true in the small-cap space. I want to truly understand a business and this requires an enormous amount of information. Developing a unique idea is largely a lone, personal process.
Checking stock quotes
I check stock quotes once a week. If a competing portfolio manager checks stocks for 30 minutes each day – 10 minutes when the market opens, 10 minutes in middle of the day and 10 minutes at market close – that’s 104 hours per year they spend watching blinking lights. I’d rather spend that time researching companies.
Assuming I read an annual report in three hours, I can look at 35 more companies each year simply by not obsessing over stock quotes. That’s no small amount. And I think my estimates of how much time others spend checking stocks is conservative.
A few other observations:
- If newspapers are dying, I’ll be the lone person at the funeral. I like them and read them frequently. The Wall Street Journal and The New York Times are by far my favourites
- I spend time reading non-business material because it helps to expand my circle of competence and potentially provides new investment ideas
- I only entered two trades during the week, and that’s probably a busy week
- At just 2%, sports took up a smaller percentage of my time than I would have guessed, and it was during the first week of the NBA season. Let’s go Raptors!
Overall, this was a valuable endeavour. I learned a little about myself, my work habits and what I value about the investment environment here at Invesco.
Have you ever recorded your work day and found valuable insights? Please feel free to comment below.