Yesterday, The Spaulding Group held a luncheon in NYC, where Jed Schneider, CIPM, FRM reviewed some of the findings from our recent Performance Attribution survey. As with all of these research projects, some very interesting insights can be drawn. And since this is the fourth time we’ve surveyed asset managers on this topic, we can compare results from one period to another, to identify trends, changes, etc. Our cosponsors for this survey were:
As with all of our surveys, we invited our cosponsors to come to the luncheon and make brief presentations, and four did. One, Steve Shefras from BiSam, mentioned how it is often said that risk and return are two sides of the same coin. He went on to say that he believes they’re on the same side. I immediately thought of a totally different anaology: a Möbious strip!
You may be familiar with them. They come from the mathematical field topology, that deals with “mapping.” A Möbious strip is a one-sided object. You can build your own by taking a long strip of paper, twisting it, and then connecting the ends. If you traverse either “side,” you’ll cover both “sides,” meaning there is only one side.
And so, rather than saying that risk and return are on the same side of a coin (which encourages one to ask, “what’s on the other side?”), we could say that they’re both on a Möbious strip, and therefore on the same (and only) side.