October 2007 Letter
Enclosed is Covington’s latest quarterly letter entitled “Predictability—Know What You Can’t Know.”
Much of economic and financial theory is based on the notion that individuals act rationally and consider all available information in the decision-making process. However, researchers have uncovered a surprisingly large amount of evidence that this is frequently not the case. A field known as “behavioral finance” has evolved that attempts to better understand and explain how emotions influence investors. Many believe that the study of psychology and other social sciences can shed considerable light on market bubbles and crashes, and help you identify and correct behavior patterns that cost you money. Anticipating change and formulating investment strategy are challenges in an uncertain world.
Our firm continues to grow with assets under management now exceeding $1.2 billion. As we have stated in the past, we are most appreciative of the many prospects that have been referred to Covington by our clients and friends. This success in large measure is based on our commitment to providing a high level of personal service while achieving competitive investment returns.
We are pleased to announce that two additional professionals have joined Covington, Mark Talt and Todd Walklett. We believe their unique skills will strengthen our firm, and we are very pleased to have them. You will be receiving formal announcements in the near future discussing their educational backgrounds and career accomplishments.
Predictability
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