Six years ago, with no savings to speak of and without a single client, I left a lucrative job during one of the worst moments in US economic history. This seemingly foolhardy choice was compelled by a single vision - to make (the sometimes Ivory Tower) world of behavioral finance more practical. Although that decision has brought me many sleepless nights, it has provided far more richness than worry. As a result of that decision I have deepened my knowledge of my craft, formed countless enduring friendships and have spoken to thousands and thousands of financial advisors, institutional money managers and everyday folks, all of whom are looking to make better decisions with their money. This journey has landed me on the TEDx stage three different times, led to co-authoring a New York Times bestseller with Chuck Widger of Brinker Capital and has given me occasion to talk to some of the most interesting people I have ever met. It has been an incredible ride, but there is still so much work left to do if behavioral finance is to realize its full potential.
For all of the progress made in the field of behavioral finance, there still remain pockets of the asset management industry that are hurting themselves and their clients through a misapprehension (or total ignorance) of the impact of mind on markets. In my opinion, improvements can be made with respect to both the management of self and the management of wealth. In an effort to bring best self-management practices to the advisory community, I will be partnering with Brinker Capital's new Center for Outcomes to help advisors do what they do best - assist their clients in making optimal decisions, all while creating a more enjoyable and meaningful financial journey. In terms of the actual managing of money according to best behavioral practices, I have recently launched Nocturne Capital.
Nocturne Capital's goal is to attempt to capture the best of irrational behavior (e.g., stocks mispriced for reasons of overly positive/negative sentiment) while avoiding the worst of what human emotion gives us (e.g., permanent loss of capital). The launch of Nocturne is the result of a multi-year effort of refining proprietary sentiment and valuation indicators aimed at giving investors something truly different - an asset management firm with a deep understanding of the weird, wonderful people that drive financial markets. Nocturne is currently structured to serve institutional clients, qualified investors and we are actively working for placement on SMA platforms that will make our strategies available to financial advisors.
My professional hero, Viktor Frankl said, "Everyone has his own specific vocation or mission in life; everyone must carry out a concrete assignment that demands fulfillment. Therein he cannot be replaced, nor can his life be repeated, thus, everyone's task is unique as his specific opportunity to implement it." I feel as though I have been blessed to find that mission in the form of "behavioralizing finance" and I thank all of you that have made this journey the kind that both feeds the mind and a growing family. If you are interested to learn more about Nocturne Capital, I'd encourage you to have a look and be in touch:
Daniel Crosby, Ph.D.