“When the facts change, I change my mind. What do you do, sir?” – John Maynard Keynes (probably; at this point, the quote has become its own little market narrative).
Portfolio Manager (PM): I need 800 words by four. Client note. Market wobble. Make it sound calm. And true.
Investment Writer (IW): Calm I can do. True is harder.
PM: Truth-adjacent, then. “Today’s move reflects uncertainty over rates, geopolitics and growth.” The usual three-headed monster.
IW: Very nice. Covers everything. Explains nothing.
PM: Exactly. Efficient prose.
IW: It’s not prose. It’s more like a giant golf umbrella of meaning.
PM: Clients like golf. And umbrellas.
IW: Ah, yes. Stereotypes and branded merch – finance at its best. Call me old-fashioned, but I’ve always thought clients like forecasts.
PM: No, clients like the feeling of forecasts.
IW: Fine. Let me guess the assignment, then. Equities down, bond yields did something unhelpful and now we need a note implying this was all broadly foreseeable.
PM: You are good.
IW: I’m a writer in markets. I have one true skill: post-rationalising the weather.
PM: Steady on. We don’t post-rationalise. We interpret.
IW: You bought the stock because margins were inflecting, management had finally stopped doing idiotic M&A and sentiment was on the floor.
PM: Correct.
IW: Then it dropped 11 per cent because a sell-side analyst moved one line in a model, a large fund puked risk and the CFO used the phrase “near-term headwinds”.
PM: Also correct.
IW: And now you want me to write: “The market is reassessing the pace of recovery.”
PM: Beautiful. Put that in.
IW: That sentence should come with a health warning.
PM: Everything should come with a health warning. That is not a reason not to print it.
IW: The problem is the note will read as if we understand what happened.
PM: We understand enough of what happened.
IW: No. We understand three plausible mechanisms, two rival narratives and one thing we definitely should have paid more attention to.
PM: That is, in fund management terms, understanding.
IW: And in writing terms, epistemology at gunpoint.
PM: Look, this is not philosophy. This is client comms. We need coherence.
IW: Markets are not coherent.
PM: No. But commentary has to be.
IW: There it is. The whole damned crime in one line.
PM: I beg your pardon?
IW: You want me to force a non-linear system into linear prose. “This happened because that.” But markets are not “this because that.” They’re “this, while that, despite the other, because everyone thinks everyone else thinks…”
PM: You’re doing the thing again.
IW: What thing?
PM: That writerly thing where you become very pleased with your own caveats.
IW: And you’re doing the PM thing where uncertainty is treated as a branding issue.
PM: Uncertainty is a branding issue. You can be uncertain privately. But publicly you need a view.
IW: Ah yes. The GFC: hold probabilistic beliefs, communicate in declarative sentences. A Giant Financial Contradiction.
PM: Exactly. You do understand the job.
IW: I understand the theatre.
PM: Same thing.
IW: Not quite. In theatre, everyone knows it’s theatre.
PM: And in markets?
IW: Everyone insists it’s science until the quarter-end letter, at which point it becomes literature.
PM: That’s unfair.
IW: It’s uncomfortably accurate.
PM: Fine. Since you’re on one today, what would you write?
IW: Honestly?
PM: No, reputationally.
IW: I’d write: “Several forces likely contributed to today’s move, including rates expectations, positioning and fragile sentiment around forward guidance. In real time, their relative importance is hard to disentangle. What matters for us is whether the underlying thesis has changed.”
PM: That is quite good.
IW: Thank you.
PM: It is also 36 per cent too honest.
IW: There it is again.
PM: What?
IW: Your allergy to Bayesianism.
PM: I run money, not a statistics seminar.
IW: Bayesianism is not a statistics seminar. It is just the adult version of having a view. Prior, evidence, update. Repeat.
PM: I know what Bayes is.
IW: No, you know the word Bayes. What you practice is something else. You call it conviction.
PM: Conviction is important.
IW: Conviction is essential. Stubbornness is expensive. The difficulty is the line between them only appears after the fact, usually in someone else’s attribution study.
PM: Cute.
IW: True though. The industry says it worships evidence, but half the time it worships consistency. Which is not the same thing.
PM: Consistency matters. Clients dislike a manager who flips.
IW: Clients dislike losses more.
PM: Debatable.
IW: You’re impossible.
PM: And yet, somehow, outperforming.
IW: For now.
PM: For now is all any of us gets.
IW: Good. Put that in the note.
PM: Don’t be clever.
IW: I’m not being clever. I’m being Bayesian.
PM: There you go again.
IW: Look, your process is Bayesian whether you admit it or not. You begin with a prior: quality compounder, or mean reversion, or policy regime shift, whatever your flavour. Then the world arrives with fresh insults. A data print. A margin miss. A new tariff. A CEO interview that sounds like hostage video. You update.
PM: In principle.
IW: In practice too, when you’re at your best.
PM: And when I’m at my worst?
IW: You defend the prior because it has become autobiographical.
PM: That is annoyingly well put.
IW: I’m a writer. I turn pain into syntax.
PM: Fine. Suppose I accept your Bayesian sermon. What has this got to do with writing?
IW: Everything. Writing has the same pathology.
PM: Go on.
IW: A draft starts as a hypothesis. Then the writer falls in love with paragraph three, builds a whole argument around it and ignores all evidence to the contrary because the cadence is nice.
PM: So writers have “positioning”, too.
IW: Exactly. We are long our own phrasing.
PM: And overexposed to our intros.
IW: Yes. We anchor on the opening line and spend 1,000 words trying to justify it.
PM: This is beginning to sound uncomfortably familiar.
IW: That’s because writing and investing are the same vice, just in a different guise.
PM: That’s a bit much.
IW: No, really. Both begin with a view. Both encounter contradictory evidence. Both involve incentives to appear decisive. Both punish visible hesitation. And both depend on the same neglected virtue: changing your mind without making a fuss.
PM: Hmm.
IW: Hmm what?
PM: I’m just thinking.
IW: Dangerous.
PM: I’ll pretend I didn’t hear that. I’m just fixating on your line earlier. “What matters for us is whether the underlying thesis has changed.”
IW: Yes?
PM: That’s the note, isn’t it.
IW: More or less.
PM: It gives the client a frame without pretending we have God’s CCTV.
IW: Exactly.
PM: And it lets us separate what the market is saying from what the business is doing.
IW: Now you’re talking.
PM: And we can acknowledge noise without sounding clueless.
IW: Welcome to probabilistic adulthood.
PM: Don’t push it.
IW: Sorry.
PM: No, but seriously – there’s something in this. We’re always asking analysts for their conviction level, but never for their update rule.
IW: Yes.
PM: And in meetings, when someone says, “Nothing has changed,” half the time what they mean is, “I haven’t changed.”
IW: Again, yes.
PM: And in the letters, we write as if the thesis was obvious all along, which is nonsense because the whole year felt like being smashed on the head with crockery.
IW: Again, yes.
PM: Stop saying yes like that.
IW: Like what?
PM: Like a therapist who charges by the hour.
IW: I’m cheaper than your behavioural consultant.
PM: Ah, but he has better shoes.
IW: Don’t get me started on pay differentials. Anyway, he also thinks “narrative discipline” means going over your childhood again and again until your parents are absolved.
PM: Fair.
IW: Ok. So, can I write the note properly?
PM: Define “properly”.
IW: With uncertainty where uncertainty exists. With alternatives acknowledged. With a distinction between market narrative and portfolio thesis. And with one sentence – just one – that implies we reserve the right to update as new evidence comes in.
PM: “Reserve the right”? Sounds legal.
IW: It is legal. It is also intellectual.
PM: Mmm.
IW: You know you agree.
PM: I certainly agree in the abstract.
IW: And in the concrete?
PM: In the concrete, I need clients not to think we’re dithering.
IW: Then don’t sound like you’re dithering. Sound like you’re discriminating. There’s a difference.
PM: That is a writer’s distinction.
IW: And a portfolio manager’s edge.
PM: You really think this Bayesian stuff belongs in a client note?
IW: Not the word “Bayesian”, unless you want emails from retired engineers.
PM: I do not.
IW: But the posture? Absolutely. Calmly held views. Explicit conditions for revision. No false certainty. No pretending every daily move has a single parent.
PM: No “markets fell on inflation fears”.
IW: Only under duress.
PM: No “the market is clearly pricing in…”
IW: Especially not “clearly”.
PM: No heroic certainty, then.
IW: Just adult conviction. Subject to change.
PM: That’s not bad.
IW: That’s the title of my next piece.
PM: Of course it is.
IW: You can have a thank-you in the acknowledgments.
PM: I’d rather have cleaner copy by four.
IW: Done.
PM: One more thing.
IW: What now?
PM: Put the Keynes quote in.
IW: The real one or the one everyone quotes?
PM: The one everyone quotes.
IW: Even if he didn’t say it exactly like that?
PM: Especially then. It proves the point.
IW: Which point?
PM: That in markets, as in writing, the story that survives is often the useful one.
IW: That is deeply cynical.
PM: No. Bayesian.
IW: You’re impossible.
PM: And yet, somehow, updatable.
