The Caveman In Your Portfolio: Why Behaviour Sabotages Returns - Alec Cutler | Orbis Investments

Investing is as much behavioural as it is academic. Some of the smartest investors and advisers have found themselves undone as they lose their mind in the noise of markets. Today's guest wants us to take a deep breath, recognise our cognitive biases and focus on the principles of good long-term investing. Today we're joined by Alec Cutler, Director at Orbis Investments and manager of the Orbis Global Balanced Fund. We speak to Alec about: • Why good investors often underperform the market • The most common cognitive biases he sees • How the Orbis Investments team use process to recognise their own biases • The risk of being too concentrated in large-cap US stocks • What we can all do to improve diversification in our portfolios 00:00 Introduction and Overview 03:01 Common Investing Mistakes 07:27 The Problem with Herd Mentality 12:21 Understanding Contrarian Investing 15:50 Alec’s View on the Current Market 19:20 Global Rotation: US to Europe 23:03 Gold and Alternative Investments 26:36 Balancing Macro and Stock Picking 30:34 True Diversification Explained 36:53 Diversification Across Asset Classes 42:57 Final Thoughts and Key Takeaways ——— CPD Points: This episode has been accredited for CPD points by the Financial Advice Association of Australia (FAAA). To claim your points, complete the CPD Quiz and we'll send you your certificate: https://equitymates.com/episode/the-c... ——— This episode has been sponsored by Orbis. If you would like to learn more about Orbis' contrarian investment approach can offer a true point of diversification when constructing client portfolios, click here (https://www.orbis.com/au/adviser/sunr...) Thank you to Orbis for helping us keep all of our content free and accessible. ——— Want more Basis Points? Sign up to the Basis Points Newsletter here: https://basispoints.beehiiv.com/subsc... Follow Basis Points on LinkedIn:   / basis-points-by-equity-mates   Have a question? Send us a message on our website (https://equitymates.com/get-in-touch/) ——— Basis Points is a product of Equity Mates Media. Basis Points is intended solely for industry professionals, financial advisers and wholesale investors. This podcast is intended for education and entertainment purposes. Any advice is general advice only and has not taken into account your personal financial circumstances, needs or objectives. Before acting on general advice, you should consider if it is relevant to your needs and read the relevant Product Disclosure Statement and Target Market Determination. And if you are unsure, please speak to a financial adviser. There are risks with any investments, including one in the Orbis funds. Past performance is not a reliable indicator of future performance and the value of any investment in an Orbis fund is not guaranteed. This podcast represents Orbis' view at a point in time and provides reasoning on why Orbis has bought or sold a particular security for its funds. Orbis may take the opposite view from that stated, as facts or circumstances may change. This podcast does not prohibit the Orbis funds from dealing in the securities before or after this is published. Equity Mates Media operates under Australian Financial Services Licence 540697.