We all make mistakes

Anthony Bolton’s investment column this weekend contains another nugget of wisdom. Coincidentally, it is linked with Archie Norman’s ‘tip for management’ which I quote below.
Bolton is the UK’s most successful fund manager. And he certainly shares Norman’s sense about the need to be humble. In fact, he goes even further, commenting that in his experience, ‘On average, you will be wrong at least two times out of five – half the time because an investment thesis proves to be incorrect, and half the time because something changes’.
He goes on to list some of the main things that can change. All of them will be familiar to commercial people in the chemical industry: ‘movement in interest rates or currencies; a change at the industry level – such as increased competition or new legislation; a new product fails to work as well as expected; a price war breaks out in a key market’.
Bolton’s caution seems particularly sensible today. As I commented in ICB last month, contingency planning has gone out of fashion in recent years. But given the current high level of uncertainty in the world economy, focused on the issues that Bolton highlights, it probably needs to assume a high priority in any CEO’s agenda.

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