STREET DOGS

Stuart Walton worked in complete solitude, with not even a secretary to help him manage his fund. “I found that having another opinion in the office was very destabilising,” he explained. “If I have someone working for me every day, they may as well be running the money because I’m no longer making my own decisions. And while not everything always has to make perfect sense, it’s important that you make your own decisions.”

Then there are the stories of those otherwise successful individuals who suffered when they broke their isolation: Jesse Livermore’s escapades with the “cotton king” Percy Thomas; Nicholas Darvas’s losses after he moved into his brokers’ offices in New York.

But going it alone can be painful. As Howard Marks points out, “non-consensus” investing has to be lonely. “By definition, nonconsensus ideas that are popular, widely held or intuitively obvious are an oxymoron. Thus such ideas are uncomfortable; nonconformists don’t enjoy the warmth that comes with being at the centre of the herd. Further, unconventional ideas often appear imprudent. The popular definition of ‘prudent’… is often twisted into ‘what everyone does.’”

“A corresponding desire to stay in the middle afflicts most speculators, myself included,” admits Victor Niederhoffer. “I am too frightened to buy something in the market when it goes straight down, and too frightened to sell it when it goes straight up. But after it has retracted a good part of the move, I am all too ready.”

Confirming what Francis Galton wrote centuries ago, “That the vast majority of persons have a natural tendency to shrink from the responsibility of standing and acting alone. They exalt the vox populi even when they know it to be the utterance of a mob of nobodies.”

Sadly, it seldom pays off.