Barry Ritholtz blog post excerpt (full here):
This week, the entirety of the nation’s investment management complex gathered in Chicago for the 25th annual Morningstar Investment Conference. From Wednesday through Friday, financial advisors sat at their banquet tables furiously scribbling notes as all the big names came out and did their predicting-the-future routines, from macro calls to stock picks. World-class quants Michael Mendelson (AQR) and James Montier (GMO) both took the stage, as did esteemed speakers from BlackRock, Vanguard, RiverNorth, T. Rowe Price, JPMorgan, PIMCO, Fidelity, Artisan, Franklin Templeton, Sage, Virtus, Brandywine, Janus and every other brand-name fund company you’ve ever heard of. Some were bullish, some were bearish, some were cautiously optimistic, some were recklessly pessimistic. Some talked of Europe while others focused on Asia, some were concerned about stock valuations while others were worried about bond yields. Some applauded the Fed for saving the economy in the recent past while others criticized it for jeopardizing the future. And after three straight days of very smart, well-groomed people regurgitating all of the clever, contradictory things they’d read in research reports and newsletters, I can only assume that the audience was utterly befuddled. So many articulate speakers, so many viewpoints, so many headwinds and risk factors and silver linings and unknowns and known unknowns…a complete overload, almost none of it particularly original or utilitarian. James Montier, as brilliant as anyone there, did an entire talk about why investors should do nothing right now – literally, he was lecturing on the virtues of inaction and quoting directly from the Tao of Pooh. And then, for the last presentation of the event, it was time for something completely different. My friend Carl Richards, a former financial advisor, creator of the Behavior Gap blog and contributor to the New York Times, closed out the conference as the final keynote speaker on Friday. I can picture him ascending the steps toward the podium, an easy gait and nonchalant manner distinguishing him from the other speakers before he even utters a word. Carl’s berth on the heels of all these presenters, panels, picks and predictions is too serendipitous to have been an accident. He uses his time to make a very simple statement that jars the entire crowd of professionals back to reality: “When clients pay attention to noise, we call it dumb. When advisors do it, we call it research. I doubt Carl made any friends among the other three dozen speakers with that quip, but I’ll bet it was the most profound remark coming from the stage all week.