“We’ve had this period in which markets, by and large – except for the dotcom bubble and Japan – behaved themselves up until 2008. I don’t think everything will behave in the next 10 years. We’re heading for a difficult decade, a decade of change.” In aggregate, the funds management industry became accustomed to the overall benign environment of recent decades. “Instead of seven years of feast and seven years of famine, the funds management industry has had about 25 years of feasting. So has the consulting industry, or any companies in investment and finance.” But the good times ended in 2008, and the industry should not expect to rebound as it did from the 1987 crash and dotcom bubble, he says. As a consequence, investors should be mindful that mathematical risk models drawing on past data will not themselves guide investors through these uncertain times. “What we see with our eyes and what we learn from history is at odds with how the industry analyses the market.”

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