Thomas Beevers, the cofounder and CEO of StockViews, gave a presentation to Columbia Financial Investment Group about capturing alpha. He discussed his background in finance, refuted the efficient market hypothesis, and outlined characteristics of top investors like emotional discipline and independent thinking. Beevers believes markets are inefficient due to human nature, and that investors with the right framework can consistently outperform by taking advantage of other investors' behavioral biases. StockViews aims to isolate the signals of alpha generators from the crowd using a crowdsourcing model, high-quality research interface, and mentorship program.

1. Capturing Alpha
Presentation to Columbia Financial Investment Group
Thomas Beevers, CoFounder and CEO of StockViews

2. About Me
• Graduate of Cambridge University.
• Corporate Finance at PwC from 1999-2004
• Fund Manager of European Equities at
Newton Investment Management in
London 2004-2014. Grew Funds from
$100m to $1bn by 2014.
• Cofounder and CEO of StockViews since
March 14

3. Finance in One Page
Capital Owners
Project
Fund Manager
Sell-Side Analyst
Corporate Financiers
Company

4. Efficient Market Hypothesis
• Still a dominant idea in
financial markets
• Taught in business schools
• A substantial part of the CFA
syllabus

5. EMH Refuted…

6. Why Inefficiency Exists…
“The reason that capital markets are, have always been, and will always be inefficient is not because of a
shortage of timely information, the lack of analytical tools, or inadequate capital. The Internet will not
make the market efficient, even though it makes far more information available, faster than ever before,
right at everyone’s fingertips. Markets are inefficient because of human nature – innate, deep-rooted,
permanent. People don’t consciously choose to invest with emotion – they simply can’t help it.” Seth
Klarman
Overconfidence
Recency
Bias
Confirmation
Bias
Pattern
Seeking
Overreaction
Bias
Anchoring
Asymetric
Loss Aversion
Herding
Predisposition
for Excitement

7. Institutionalized Behaviour…
Institutions often reinforce behavioral bias.
- Herding. Proximity to financial centers.
- Confirmation Bias. A ‘House View’ can become embedded.
Organization looks for confirming evidence of House View.
- Asymmetric Loss Aversion. Career Risk

8. Characteristics of Top Investors
- Engage in Thorough Analysis
- Philosophy of How Inefficiencies are Created and How to
Take Advantage
- Emotional Discipline. Do not succumb to panic or euphoria.
- Humility. Recognition that luck plays a large role
- Independent Thinkers

9. The Problem with Contrarian Investing

10. Characteristics of Top Investors
Look at market fluctuations as your friend rather than your enemy;
profit from folly rather than participate in it. Warren Buffett
Not only do investors go wrong, they go wrong in a systematic and
predictable manner. So predictable, in fact, that consistent
investment strategies can be built on their mistakes.
Successful investors tend to be unemotional, allowing the greed and
fear of others to play into their hands. Seth Klarman
If you want to have better performance than the crowd, you must do
things differently from the crowd. John Templeton

11. Characteristics of Top Investors
Our greatest power is that we know that we don't know
and we are open to being wrong and learning Ray Dalio
Once we realize that imperfect understanding is the human
condition there is no shame in being wrong, only in failing to
correct our mistakes.
Our goal is not to outperform all the time -
that's not possible. We want to outperform
over time

12. Capturing Alpha
Consider these two assumptions:
1. Markets Are Inefficient
2. Investors with the Right Framework can Consistently
Outperform
If we accept the above, then the next logical question is:
Can we isolate the alpha generators from the crowd?

13. Crowdsourcing Alpha
Market Price (Inefficient)
Extract Signal (Less Inefficient)
All Market Participants
Alpha Generators

14. Sell Side Research
Dissatisfaction with Sell Side
1. Conflicts of Interest
2. Too Close to Company
3. Waterfront Coverage
4. Think Like the Consensus

15. StockViews Model
Proof of Alpha
Generation
High Quality
Research

16. StockViews Interface

17. Tools for Investment Clubs
Pending Development

18. StockViews Mentorship Program
10 Students Selected who show strong analytical capabilities
and independent thinking
Selected Students will receive one-on-one mentoring to
improve their analytical skills
To work together on 3 articles over a period of 6 months
Apply by sending 2 recent articles to tom@stockviews.com