Burton Malkiel has been saying the same thing about investing for more than 40 years. What’s new is that a big chunk of the financial industry now admits he was right all along. In 1973, Malkiel, a Princeton professor, published the first version of his investment guide, A Random Walk Down Wall Street. He wrote that “a blindfolded monkey throwing darts at the stock listings could select a portfolio that would do just as well as one selected by the experts.” Since most investors can’t beat the market average over time, he argued, they’d be better off in some kind of low-fee fund that simply held all of the stocks on a widely followed index. Problem was, no such retail fund existed. The Prof Who Made a Monkey of Wall Street, Bloomberg Businessweek, September 26, 2016.
What I like is that someone just looked at the numbers — ignoring all conventional wisdom — and realized that reality was different from what everyone assumed and just knew to be right. But even with this insight and even as the data became readily available to more people, it still took decades before the insight became recognized as … obvious.
The nice thing about challenging conventional wisdom is that enough of it is flawed that it gives us a lot low-hanging fruit to go after right now. Of course, by being early and hence temporarily unconventional, we get push back for being just that but as an early mover we just have to persevere.
What conventional wisdom in your project or organization is ripe to be challenged to the benefit of your project?