Invest in what you know, avoid what you don’t: Lessons from a Hall of Fame fund manager

Despite all of his success, Morry Waked has remained relatively under the radar. He’s not one to boast of his achievements, and he’s very rarely fronted the media. At Livewire, we dedicate ourselves to finding the best fund managers in Australia - and in a testament to how underground Morry is, he hadn’t even popped up on our radar.

Last week, however, he found himself thrust into the spotlight. 

In front of a room of his peers, Morry was inducted into the Australian Fund Manager Hall of Fame - joining a now 22-name strong list of the country's most recognisable fund managers such as Kerr Neilson, Chris Cuffe, Anton Tagliaferro, Catherine Allfrey, Philip King and many more.

What’s unique is that all 21 other fund managers on this list are fundamental investors. This is the first time that someone who employs a quantitative, or systematic approach to investing, as Morry describes it, has been added to the Hall of Fame.

As a young boy, Morry excelled at math. This would see British insurer Legal & General pay his way through university and secure a role with the firm after his degree. From there, Morry learnt a lot - and fast. At just 23, he became the head of quantitative research at Rothschild Asset Management. By 26, he was brought across to Barclays Global Investors as the firm's head of equity investments in Australia. 

He would spend more than a decade at BGI, where he eventually became the firm's global chief investment officer of active equities – responsible for around $300 billion on behalf of its global clients. In 2010, he left the investment giant to help start a quantitative firm, Vinva Investment Management, and once again get closer to the markets. 

And yet, Morry admits the longer he spends in the industry the more he realises the "unknowns" vastly outnumber the "knowns". 

“The majority of stock price moves and volatility that you see every day is driven by noise rather than information," Morry explains. 

“What investors may get wrong or they miss is there is a lot more that they don’t know than they do know. When you are constructing portfolios you need to have a laser-like vision, focus on what you know, and try to get those insights into your portfolio. 

"But also, ensure that if there are things that you don’t know much about or there are risks that you can’t explain or model very well, you can try to find ways to hedge them or reduce exposure in your portfolio." 

In this podcast, Morry sits down with Livewire's Ally Selby for a look at his remarkable career, a deep dive into quantitative or systematic investing, as well as some of the latest market insights he and his team are drawing from their research models.

Note: This interview was recorded on Thursday 26 October 2023. 

Follow & Listen

• Podbean
• YouTube
• Spotify

Timecodes

• 0:00 - Intro
• 2:59 - Fate and purpose: How Morry fell into funds management
• 3:59 - On trying to educate investors on quantitative/systematic investing
• 5:45 - Morry's career journey
• 7:02 - The greatest lessons from Morry's career so far
• 8:50 - Markets and models change, but Morry's philosophy doesn't
• 10:35 - On using Artificial Intelligence in investing
• 11:16 - A beginner's guide to quantitative/systematic investing
• 12:58 - Common misconceptions
• 13:56 - The importance of remaining unemotional when investing
• 15:05 - Where we are in the cycle today
• 17:43 - Where Morry and the Vinva team see opportunity both locally and abroad
• 19:07 - Why these models give Vinva a leg up on the competition
• 22:17 - ROI's common questions: What the market is getting wrong and lessons from wins and losses from Morry's career