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An interview with Chris Godding

Chris Godding is the man with ultimate responsibility for how we manage money at our wider Tilney Group. As Chief Investment Officer he is in charge of the group's investment process, which encompasses everything from asset allocation through to investment selection and portfolio construction.

Chris joined the Tilney Group in February 2017 and brings to the company more than 30 years' experience of working in financial markets. Here he discusses how, in a world of news and information overload, he succeeds in distinguishing what is important from the noise in order to create a clear investment message and vision.

Experience matters

Chris believes his decades of experience have helped him learn how to filter through the masses of available market data and find what is important, rather than just noise.

"Information overload is a huge issue in the industry so I think experience is incredibly important in understanding how to see the wood for the trees. And there are a lot of trees out there, so it is critical to filter the data and isolate what really matters. I've been doing this for a long time and I've got used to seeing the important things and filtering the rest out. Anyone in any profession over time will see patterns and a style they like and will say, 'ok, that's important and the rest is just derivative.'

If you were a fashion designer trying to find new talent, you would know how to filter out all the people who were essentially just copycats and you'd see the original things. You'd only see this because you had the experience of making lots of mistakes. Through having the latitude to make lots of mistakes you have a learning curve in how to make the right decisions, and that comes with time. I do think that some people are much more talented at it than others and in that respect our industry is like any other – there are talented politicians, talented artists and talented business people. There are people who are just better at this role than others and it is their ability to use a combination of intuition and logic in the right way to distil information.

These days I can go through market data very quickly. Do you remember in the film The Matrix when the guy looks at the screen and sees all those numbers? People in my position look at a Bloomberg screen with hundreds of panels and get a feel for what the market signals are. Understanding these tells me if something important is happening. There isn’t much happening in the markets on most days but people still try to make a lot of noise. But then there are days when something important is happening and you see a real change in sentiment and investor appetite so it's important to pick up on those.”

Intuition is not enough

Chris is quick to debunk the Hollywood version of an investment expert who survives on gut instinct – he says there is no substitute for hard work.

"Nothing comes from intuition alone. Understanding something and making a judgement is not a question of luck – it's hard work. It's a bit like the golfer who says, "the more I practise, the luckier I get." The biggest problem for fund managers and asset allocators is overconfidence. As soon as you become overconfident you stop working and you make mistakes."

There are days when something important is happening and you see a real change in sentiment and investor appetite so it's important to pick up on those.

Focus on what is important today…

To demonstrate how he sifts and orders information to find out what is important right now, Chris talks about China.

"There are many things to worry about in the world and one of them is clearly the growth of credit and debt in China. It is a major issue and it is unsustainable but the important decisions you need to make are whether it is going to be critical to the environment this year and when it is going to be something that will come into focus. It is important to be able to compartmentalise and essentially stick this issue in the right drawer for later rather than think of it as something to focus on today because this will cloud your judgement. So it's knowing those issues are out there and being able to put them in a timeframe so you can essentially focus on what is important today."

…And have conviction in your decisions

Chris is a firm believer in making fewer, high conviction decisions. This not only shapes his own decision-making but also how he has structured his team so that everyone is highly focused.

"The fewer decisions you make the better, because your decisions have more impact and they are of a higher quality. The problem with many investment managers and the people who are looking at all this noise is that they are trying to make too many decisions. I say to people, 'stop making marginal decisions, focus on your core convictions and then put some weight behind those convictions. And don't hedge them out with lots of marginal ideas that you think you should have as a safety net'.

The best fund managers have concentrated portfolios because they realise that they can only make 20 to 30 really good decisions and after that everything becomes marginal. Our investment philosophy at Tilney is about asset allocation first, then portfolio construction followed by implementation and performance measurement. There are groups within my team that are 100% focused on each area in order to focus the outcomes in each. We deliver the message that our investment professionals then go and talk to clients about.”

Chris and his team write regular thought pieces and updates that are published in the news section of the Tilney website. If you would like to know more about the range of investment services available through our wider Tilney Group, please call us on 020 7189 2400 or email best@bestinvest.co.uk.