Wednesday, March 2, 2011

The last 10% & Mulligans

I am confident that anyone who has been involved with the development of software will agree that the first 90% of a project is much easier to accomplish than the last 10%; the balance sometimes takes "forever!" Even husbands who take on home projects often get 90% of it done, with a plan to finish the rest, but simply never get around to it. Well, the same issue seems to apply to writing books, as getting most of the work done is much easier, at least to me, then the balance.

Case in point: the second edition of my third book, The Handbook of Investment Performance. I got the transcript wrapped up in relatively quick time, but the editing, layout, etc. seemed to take much longer than we had planned. And as we neared the "finish line," I got an email from someone from CalPERS who had some corrections to errors he discovered: talk about perfect timing! For this I was quite grateful, as I had overlooked some of them in my review. Well, the wait is almost over and the book is at the printers, with a delivery date fast approaching.

The book has served as a "Mulligan" for me. If you're not a golfer you may not be familiar with this term, easily translatable as a "do over." In a casual, friendly game of golf, if a player hits an errant drive it isn't uncommon for him or her to say "I'll take a Mulligan," meaning I will hit that shot again, without any penalty. This book is a Mulligan for me as it is allowing me to make some significant changes to the first edition, which was arguably a Mulligan for my very first book, published by McGraw-Hill.

Shortly after the earlier edition went to print I had an "epiphany" which I would liken almost to being "born again," as it has caused me to develop passion for what has become one of my favorite topics: money- versus time-weighting. I was so pleased to be able to write it that this chapter will be available on the CFA website.

You'll also notice that I have clearly admitted that "Modified Dietz returns are money-weighted." There, I said it again! I have caved into my colleague and friend, Carl Bacon, who long ago chastised me for failing to acknowledge this. And although I had known for some time that he was correct, I hesitated in stating it because it only, I thought, makes this topic even more confusing. I hope that my presentation in the book is lucid. And as for Carl, I do hate it when he is right, but fortunately this does not occur too often.

Our firm is actually running a "pre-order" or "pre-release" special on the book, so if you're inclined to purchase a copy, this is the perfect time. For details please contact Patrick Fowler

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