Alex Chappell

18th May, 2018

IC Insights


As a beautiful evening in a valley in Leicestershire ensued, I was gearing up for the first tennis match of the season. I was feeling positive; practice had been going well, the sun was out, the courts were looking great, and I was eager to get competitive.

Three-hours later I found myself frustrated. I had played terribly, possibly the worst I could remember. Conditions were perfect for some great shot making, but I literally couldn’t hit a barn door. Peak-frustration comes right at the end as you walk up to the net to shake hands and the opposition say “well played”. You feel like saying “get lost, I had a shocker!”, but you don’t, you grin and exchange niceties.

After the match I was discussing my frustrations with my teammate Jason. He said “what was it then… what did you feel went wrong?” “I’m not sure – it felt like lots of things, above all, I think I let it get in my head”, I replied. He started telling me about a book he had been reading, about the psychology of self-critique and how destructive it can be to decision making.

It is interesting that we quickly get annoyed if the very high expectations we set ourselves aren’t met. As we lose patience, our thinking becomes clouded. In my case I was trying to play shots that just weren’t there to be played. Ashley (our Managing Director) has always been a big advocate of Dr Steve Peter’s book “The Chimp Paradox”, and this was definitely my emotive ‘chimp’ brain overriding my ‘logical human’ brain.

This all got me thinking about our Investment team. We are also very self-critical – even when things are going great we are looking at ways to improve what we do, both in terms of the portfolios, and internally as a team. Recent examples of the team’s development include; Dec’s university research piece which is on its way to be published in a finance journal and my recent delight at being named in Citywire’s Top 30 Under 30. We are also investing in more appropriate technology to further improve our decision-making process.

Probably the most frequent self-critique originates from our investment ideas though. We take great personal pride in the results we deliver for clients and take it very personally if things don’t play out as we expect. Woodford, one of our core holdings, has had a tough 9 months. Whilst we have completed all-manner of research into the reasoning, and do not believe this trend will continue, it doesn’t mean it hasn’t hurt. We have to look through media noise around short-term performance, thus avoiding emotional (chimp brain) reactions, instead apply logic and reasoning to decide whether the fund still has the ability to meet our client’s requirements over the longer term.

Is self-criticism good, bad or indifferent then? In a pressured environment, where you don’t have time to think, allowing yourself to be too critical can make you highly likely to make errors. Reflecting on how we behave in a situation like this can only lead to improvement. So for me, once you give yourself time to reflect and it is your logical human brain that’s back in control, self-critique can only be a good thing. Over the longer term, reflection aids learning and development which we believe are key characteristics of success. It is something that we strive for at DB Wood; we don’t try to be number one, we simply strive to be better in the next 6 months than we are now. After all, it’s the infinite long game we are playing, and not a finite ‘best of 3 sets’ tennis match. On that note, it’s time to sign-off and head out to the courts for our second league match, and I plan to enjoy it.