The Dangers of Following The Herd

Published on
March 13th, 2020
47 minutes

The Dangers of Following The Herd

The Interview ·
Featuring Jim O'Shaughnessy

Published on: March 13th, 2020 • Duration: 47 minutes

Jim O'Shaughnessy, chairman and co-CIO of O'Shaughnessy Asset Management, joins Real Vision's Ed Harrison to discuss the proper investing mindset that is a prerequisite for sustained investment success. He proposes that volatile downswings in stocks is precisely why there is such a thing as an "equity risk premium." O'Shaughnessy argues that investors who "follow the herd" are often destined for mediocre performance and that a more contrarian, counter-cyclical approach will lead to better results. Filmed on February 28, 2020, in New York.



  • SC
    Sam C.
    25 February 2021 @ 10:13
    omg I missed this last year.
  • ST
    Simon T.
    24 March 2020 @ 08:03
    Very good and very true ... emotions and emotions and yet I wouldn’t give my wealth to a robot
  • AP
    Antonio P.
    22 March 2020 @ 16:57
    I agree - excellent!
  • DP
    Dan P.
    21 March 2020 @ 14:31
    Great interview!
  • NR
    Nelson R.
    20 March 2020 @ 04:50
    Jim is fantastic on this interview. Bring him back ... often.
  • CC
    Charles C.
    18 March 2020 @ 22:56
    really good interview. Great to have at a time like this
  • MS
    Mark S.
    17 March 2020 @ 05:33
    Ed made an exceptional point regarding making a partial move to satisfy a panicky investor. He understands the need for some sort of action in a crisis environment and how to get the best outcome.
  • AC
    Andrew C.
    17 March 2020 @ 03:05
    I think it’s about time to interview Ed. Give us a run down of what you have learnt in your 50 years, along with your most important learnings from the range of interviews and interviewees across the past few years!
  • JO
    JOHN O.
    16 March 2020 @ 17:39
    Excellent friggin interview! Yes, it may have been basic and common sense based and no, there were no trade ideas. But this ought to be turned into a PSA and be required viewing for the public at large. If your crystal ball has been a bit hazy or you haven't been listing to Raoul and Julien for the past couple of months and are not in cash, listen to the man and sit tight. It is gut-wrenching watching "investors" doing the same thing so many were doing in early March 2009.
  • ML
    Mehdi L.
    15 March 2020 @ 00:57
    Did I just lose 45 min?
    • BM
      Bryan M.
      15 March 2020 @ 19:35
      Yeah...but in 5 years it will just be a number on a page...if you keep a journal, that is!
  • FB
    Frank B.
    15 March 2020 @ 12:58
    Fantastic interview and perspective, thanks Jim and Ed. I can witness a lot of that human behavior in my daily work outside finance, believing in stories rather than facts, generalizations, overactivity.
  • DB
    Drimboceanu B.
    15 March 2020 @ 01:08
    10:10 Jim: You're too young to remember... Ed: Nah, i'm actually 50 lol
  • JC
    Jerry C.
    14 March 2020 @ 18:34
    Great conversation, but excuse my ignorance - At the beginning, Jim said "the stock market is a complex adaptive system, which meant the changes come from below, not above". What does this mean?
    • DB
      Drimboceanu B.
      15 March 2020 @ 00:50
      He was probably referring to the fact that in a complex systems, individuals (market participants in our case) are the ones who make the changes in the system, collectively.
  • MT
    Melvin T.
    15 March 2020 @ 00:27
    Meh. Some interesting points, with a generous dose of wall st sales-speak.
  • EV
    Erik V.
    14 March 2020 @ 23:53
    Vapid and full of platitudes. The whole framing that decisions to sell are panic/emotion based is obnoxious and might look pretty foolish by the time this cycle bottoms. What if eagerness of demonstrate coolness under pressure and “buying the dip” (rebalancing, according to his advice) is actually now the herd mentality?
  • JL
    Joshua L.
    14 March 2020 @ 16:06
    My first video watching jim, seemed to have the long view and I thank him for not saying at the end of the day but expounding on a infinite time line cause that's reality.
  • JK
    Jay K.
    14 March 2020 @ 07:11
    Do you have a Canvas customization for something with zero fees? I hate fees.
  • AC
    Andrew C.
    14 March 2020 @ 05:12
    Very interesting comments on indexation, cap-weighted, equally-weighted and cost minimization. Sign Jim up for the ‘active versus passive / indexation’ debate RVTV SHOULD be planning. Jim and Mike Green would be interesting adversaries.
  • JA
    John A.
    13 March 2020 @ 13:53
    I'm not paying for realvision to listen to a infomercial about this guys canvas product.
    • DD
      Douglas D.
      13 March 2020 @ 19:01
      I agree with John's comments!
    • DS
      David S.
      14 March 2020 @ 02:52
      I am partial to a good Irish tale. You can learn a lot from any long-term investor that survived the markets. I loved the four horsemen - fear, greed, hope and ignorance. We normally just hear greed and fear driving the market. I am not sure that his same paradigm will work in the "new" markets, but he is certainly correct about human emotions. I do not have an infinite horizon and I do worry about my current nest egg in the short and medium time frames. I even went against my bedrock insurance policy (FEAR) with gold as I sold off my basis before too much carnage happened. I will go back into gold shortly (GREED) and I HOPE I get a better price. In the "new" markets many systems work often in the same portfolio. If you do know the different systems you are ridding the fourth horse. DLS
  • MH
    Michael H.
    14 March 2020 @ 02:10
    he looks like he has the corona
  • DW
    David W.
    14 March 2020 @ 01:31
    Great interview!
  • BH
    Benji H.
    14 March 2020 @ 01:09
    This was great. Thanks!
  • DM
    Dominic M.
    14 March 2020 @ 00:11
    Great interview - thanks!
  • JE
    James E.
    13 March 2020 @ 23:18
    Spot on Jim, great to listen to.
  • JH
    Jesse H.
    13 March 2020 @ 20:44
    Fantastic. Thanks, guys!
  • FG
    Frazer G.
    13 March 2020 @ 18:48
    Fantastic interview.
  • FC
    Frank C.
    13 March 2020 @ 14:46
    It took 5 years, but It was well worth the wait. Thanks RV for bringing Jim on!
  • PG
    P G.
    13 March 2020 @ 14:19
    I love him! He is so clear and informative!
  • BD
    Ben D.
    13 March 2020 @ 13:37
    Great sharing of knowledge from Jim as always. What can be really scary in a time of great emotion such as now are people who are novices thinking they are experts and armed with quotes from various people without knowing the meanings behind the quotes. A big thanks to RV for having on Jim while making sure he cant use his "Gifs" during the interview or in the comment section.