Once upon a time, portfolios were constructed via story-telling. Once built, they were marketed via data.
Our understanding of how returns are generated has changed in the past two decades, which in turn has led to a change in ways the financial industry assembles, manages and markets investments.
In broad terms, the paradigm has been flipped on its head: Portfolios now are carefully constructed based on data and marketed by way of narrative story-telling.
For those who doubt this inversion, let's do a little comparing and contrasting. If you started in the industry before the dot-com implosion of 2000, you have surely heard some variation of these from asset managers for adding a stock to a portfolio:
“This company has great competitive advantages.”
“Revenue and earnings can surprise to the upside.”
“We love the way the company is executing on its business plan.”
“The business is gaining market share at the expense of the competition.”
“One of the most innovative companies we have ever seen.”
“Their product pipeline is second to none.”