A sensible shot heard around the world

BRWM directors Richard Wood and Igors Alferovs have collaborated with leading investment author Larry Swedroe to write and produce the UK edition of his book, 'Think, Act and Invest Like Warren Buffett' (see our 'Good Reads' section for more information and how to buy).

US evidence investing writer and blogger Wendy Cook has interviewed Richard and Igors about both the book and sensibleinvesting.tv, and has kindly given us permission to reproduce the article here. 

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Igors Alferovs (left) and Richard Wood (right) with Larry Swedroe.

"I don’t remember how I discovered SensibleInvesting.TV and its landmark video series, “Passive Investing: The Evidence.” But I do remember my reaction when I did: Eureka! It was one of the first times I knew that US and UK investors alike had sensible proponents of evidence-based (formerly “passive”) investing, to help them find their way in our grueling global markets. 

"The respect is clearly mutual. The series features some of the same familiar voices we’re used to heeding here in the states – so familiar that their surnames usually suffice: Bogle, Sharpe, Fama, French, Bernstein (William, that is), Malkiel, Ferri, Goldie … And Swedroe, Larry Swedroe, who has both shaken and stirred the financial community many times over with his collection of investment books for helping everyday investors discover evidence-based investing. 

"Imagine my delight when I learned that Sensible Investing’s founder and host Richard Wood and his colleague Igors Alferovs had recently collaborated with Larry to publish a British version of one of his most popular books: “Think, Act and Invest Like Warren Buffett.” 

"I was pleased when Richard and Igors agreed to share with me their experience advocating evidence-based investing in the UK. Here are the results." 

What is Sensible Investing? When did you found it and why?

Sensible Investing is an online video channel and information website featuring film, articles and comment about evidence-based, or passive investing. We began it in 2012 while we were making our documentary Passive Investing: The Evidence, and realised there was a gap in the market for independent, impartial, fact-based information about investing. This was especially the case in the UK, which was (and still is) years behind the US in awareness of the true cost of traditional active investing. An online channel for videos, blogs and downloads, combined with an active social media presence, seemed to be the best way of reaching as many people as we could. Although it’s funded and run by our wealth management firm BRWM, we are committed to keeping it as independent as possible, and are happy to feature content from other organisations who share our beliefs.

What was the inspiration behind collaborating with Larry Swedroe on a UK version of his book, “Think, Act and Invest Like Warren Buffett”?

Larry got in touch with us having seen sensibleinvesting.tv and mentioned that he was thinking of working on a UK edition of the book. We offered to help and that was that. We often give our clients copies of books that explain our approach to investing. Dan Goldie and Gordon Murray’s “The Investment Answer” is a favourite, along with “Smarter Investing” by Tim Hale, with whom we’ve worked closely on a number of projects. But at the time there were very few, if any, books written for a UK audience which were digestible for the investing novice, featuring investments that British people could easily access. Larry’s book ticked all the boxes, so it seemed a great opportunity. 

What were some of the most interesting challenges related to Anglicizing the book?

There was a lot more work that we’d originally anticipated. While there are many critical similarities between us, with the UK, you’re almost talking a different language – in more ways than one! For example, we have different pension systems over here (no-one in the UK would know what 401(k) plans are), our tax laws are different, and so on. 

The biggest challenge from a financial point of view was to completely re-calculate the model portfolios in chapter 6 using investments that were available to the majority of UK investors. We also had to rework the many examples of stock market events in the book to make them relevant to the UK. Markets rise and fall differently in different territories, and sometimes respond to different factors, so we either re-calculated using FTSE figures instead of S&P 500, for instance, or used different scenarios. 

Linguistically, we changed “Wall Street” to “The City” and so on, and anglicised the spellings of words like honor/honour and behavior/behaviour. We also added in a glossary, which we worked on with Larry. 

Some of our clients “sense checked” the book for us before it went to the publishers so we could catch anything that might not make sense to the people it was aimed at. 

What was it like to collaborate with Larry?

It was great – he was open to all of our suggestions and just let us get on with it! We collaborated mainly over email, although we did visit him in St Louis during the making of our recent documentary, “How to Win the Loser’s Game.” There was a lot of to-ing and fro-ing over many months and probably about eight or nine versions – and that was before it went to the typesetter. Larry found our “idiosyncratic” UK English spellings and idioms strange sometimes: He couldn’t quite believe that we say “Maths” instead of “Math,” for example. 

How well known is Warren Buffett in the UK?

He’s probably the best-known investing name over here, but we were surprised that several people we asked had never heard of him. He is occasionally referenced in mainstream news and fairly regularly in the financial media, often in relation to his philanthropic collaboration with Bill Gates. He’s certainly not as well known here as he is in the US, which was why we added an introductory chapter about him to the book. 

Who is the book meant for? How can advisers order it if they’d like one or more copies?

The book is appropriate for the same audience we had in mind when we started sensibleinvesting.tv – people who want to know more about investing, and low-cost investing in particular. It’s certainly not aimed at experts and we’d envisage most readers should be able to finish reading the book in a couple of sessions. 

It’s available as an e-Book on Amazon or in print via the BRWM website. We are also offering UK financial advisers and wealth managers the opportunity to create their own bespoke [customized] edition of the book as a unique gift for clients. Each bespoke edition will feature the company name on the cover and a personalised foreword, which we can help write. Interested advisers can email richard.wood@brwm.co.uk for costs and more information. 

If you could change one thing about “business as usual” in the UK’s financial industry, what would it be?

It’s a pipedream, but it would be nice if the whole industry – from regulator, through product provider or fund manager to financial adviser – were all client-centric in the way they operated.

What other initiatives has Sensible Investing completed? What’s in store for the future?

There are hundreds of videos on the site and we’ve interviewed some of the biggest names in the business. Our YouTube channel has more than 4,000 subscribers and the original documentary has been viewed more than 160,000 times. We’ve covered almost every angle of the passive/active debate, often at quite an academic level. So we’re reviewing the future of the site and looking to make it more inclusive, with contributions from like-minded organisations and third parties. We also want to get back to our roots – making it more of a resource for individual investors and for financial advisers to use with their clients. We’re currently working on a new series of motion graphics videos, which should be complete later this Spring.