The rules of branding
James Montier is an economist and global equity strategist at Dresdner Kleinwort Wasserstein, a German-owned investment bank. According to an article at Fast Company, Montier claims that analysts shouldn’t bother meeting with top management at the companies they cover since analysts only ask questions that encourage the answers they want to hear.
Montier may be considered a financial heretic, but he’s a genius at creating a brand. Early in his career, he became intrigued by the role of human emotions in markets. He theorized that prices were moved as much by psychological factors as by earnings reports, a view that can only be labeled contrarian.
In a world where "great instincts" or knowing which direction the markets are heading is viewed as the Holy Grail…. Montier has developed a following, despite the fact that he does not play by the rules of the game.
"Montier has a substantial following because he focuses on things that are fundamentally different from the rest of the stuff I get in my inbox," says Curt Custard, head of asset allocation at Schroders in London, one of Montier’s clients. "He is next to useless when it comes to telling me what the markets are going to do. But he has been incredibly helpful in leading us through self-critical examination of what drives our internal decision making at Schroders."
Talk about creating a Unique Selling Proposition…. Montier doesn’t say, "I know what’s going to happen." Instead he says,
Every fund manager who comes to one of my presentations takes a 20-question test that convinces them they suffer exactly the same biases as everyone else. People respond to that in one of two ways: The first is to say, "Now I understand it, I’m smarter than everyone else, so I can outthink everyone else." No, you can’t! You’ve just failed behavioral economics 101, which explains that we are all overconfident in our abilities. The other response is, "Okay, I understand my biases. Now help me develop processes to spot where they are most likely to occur, and minimize the scale of these biases."
He also touts the message that wealth does not equal happiness. But that’s yet another contrarian view in a world where bonuses are spent buying Ferraris and island get aways.
Montier may be a pioneer in behavior economics, but he’s following the hard and fast rules of successful branding. He’s carefully carved a niche and has the full attention of those within that niche.
