Paradigm Shift

I endured a manual gearbox in a car until 1994. For fourteen years I believed that true motoring pleasure could only be derived by co-ordinating a movement of my feet in opposite directions, along with a pull or shove of my left arm. Whenever I bought a car I was looking forward to the enjoyment of the open road, but the truth usually looked more like a crowded M61/M62 interchange on a wet Friday evening. In a traffic jam manual cars are such hard work compared to automatic cars. I watch Jeremy on Top Gear every week and think “I bet you drive an automatic to work really”.

I made a “Paradigm Shift”. It consisted of me challenging a long held personal belief; I dared to question something I knew and discovered I had been wrong for years. I had hardly ever enjoyed swiftly moving through a seamless 5 speed gearbox along a rolling country road; motoring was the necessary act of getting from A-B. Since then, every car I have owned has been automatic. I will never go back to a manual box.

A Paradigm Shift describes that awful moment you realise that you weren’t right after all. Your previous position was wrong and it has been proved to you. It can be embarrassing, but it usually takes you to a new place; a better place. We know the definition of insanity is doing the same thing all the time but still expecting a different result.

My investment process underwent a Paradigm Shift in 2005 and again in 2007 and again in 2009. I know I will make more shifts. Getting a fair result for clients only became possible once I had thrown away all my previous investment experience. I used to simply give the money to an insurance company and trust them to put the well-being of their policyholders before their shareholders. In hindsight what I did for 20 years or so now appears naïve, but I followed conventional wisdom.

Transparency is the key to getting a fair investment return. Let’s not trust anything we can’t see. Let’s not invest in areas we don’t understand. Let’s not remain baffled by complex charging structures. The major Insurance Companies are suffering massive outflows of money, their share prices are plummeting and they are being forced to cut costs and staff. It is clear that I am not alone in not believing their previous outrageous promises. If you own Insurance Company shares sell them quick.

Last week Barclays was fined £7.7m for mis-selling Aviva (Norwich Union) products and they have been ordered to repay £60m to their wronged customers. The result is Barclays have said enough is enough and are shutting their Financial Advice business making 1000 redundant. And yet Aviva can still sell their products and ask IFAs to recommend them in return for commission. Many IFAs still do!

It was Thumper in the 1942 film Bambi who said, “If you can’t say anything nice, don’t say anything at all”. Thank you to Iain Lindsay who got it correct and reminded me it was “don’t say nothing at all”.

In the vein of doing the same thing but expecting a different result…. At Salford University I studied Statistics; can anyone tell me what the odds are of choosing 6 correct numbers out of the 49 in the National Lottery?