Better Portfolio Management through Music Appreciation

Alpha Strategies 16 Jul 2013

davidbyrneby Doug Friedenberg

We were fortunate enough to hear and see a concert by David Byrne and St. Vincent recently.  David Byrne, you might recall, was a founding member of the band Talking Heads, which produced successful albums with titles like “More Songs about Buildings and Food.”  St. Vincent, whose real name is Anne Clark, has had her own successful music career, which has blossomed over the last four years.  Wikipedia noted: Clark’s music has been noted for its wide array of instruments and arrangements, as well as its polysemous lyrics, which have been described as teetering between “happiness and madness”. We had to look up ‘polysemous’, an astonishing new word, and found it to mean “the capacity for a word or phrase to have multiple related meanings (sememes), i.e., a large semantic field, as distinct from homonymy, in which the multiple meanings of a word may be unconnected or unrelated.  Admittedly, it’s not a word that will apply much to research reports.  But we’ll never look at a homonym the same way again.

Once that mystery was cleared up, we also learned that Ms. Clark was born about five years after Talking Heads’ first album was released.  This made her comments during the concert about Mr. Byrne’s influence on her own musical development from an early age all the more meaningful.   We rather had the feeling that we were witnessing the musical equivalent of a line of apostolic succession. Oh, but we were going to tell you about the concert itself.  This is a tripartite report, including the visuals, the music, and the lyrics.

The Music

The instrumentation included a baritone saxophone, a saxophone, a sousaphone (tuba), two trumpets, two trombones, a French horn, a keyboard, and drums.  In addition, Mr. Byrne played rhythm guitar, when he played at all, and Ms. Clark was on lead guitar.  The instrumentation provided an underlying comic undertone, considering the effects of the baritone sax and the tuba. This was a substantially different effect from a bass guitar or string bass providing the bottom to the group. As with other work by Mr. Byrne, there was a panoply of rhythms throughout, with chord changes well away from the more typical progressions found in so much popular music.

The Visual Phenomenon

When we entered the concert hall, all the instruments were lying scattered, individually spotlighted, on the stage.  That was just the beginning.   You’ve no doubt seen a Madonna or Lady Gaga-type production number with lots of dancers swaying rhythmically like every other production number ever created, vying for greater sensationalism. Instead consider a very small marching band assembling and re-assembling itself throughout the concert in a tightly choreographed, almost kaleidoscopic sequence, including the two lead performers. The Grateful Dead this was not.  Simple though it might have been, the band’s movements served to trivialize and make subtle fun of what today passes for over-produced entertainment. Band members also had mini-solo performances, as when two of them put their instruments down and did a few jumping jacks.  For one song, most of the band were lying down on the stage (as was Mr. Byrne) and playing from their designated horizontal positions.  In another, the band formed a moving circle, and each member sang a line of “Wild, Wild Life” into the microphone as the circle slowly rotated. And then there were the two stars.  Whoever sang lead generally took center front stage, while the other disappeared into the band formation. Mr. Byrne, resplendent in white shirt and slacks, with a black sport coat which disappeared early in the set, seemed like an ever-so slightly demented ringmaster.  When he sang lead, he occasionally spent the bridge between verses making highly stylized physical gestures which clearly were rife with meaning, even if one couldn’t tell exactly what.  If you’ve ever seen the video for “Once in a Lifetime,” you’ll know what we mean. Ms. Clark, on the other hand, would hang towards the back of the stage until it her turn to sing lead.  Then she would take tiny steps forward to the microphone, as if she were a geisha whose leg movement was constricted by her kimono.  And then, singing finished, she would walk back to her spot backwards in precisely the same way. The visuals were as rich, innovative and wry as anything we’ve seen in this genre.  Definitely not for Disco Donnies, though.

The Lyrics

Mr. Byrne and Ms. Clark are both skilled at taking features of quotidian life, and imbuing them with a higher meaning.  Typical are these lines, from Mr. Byrne’s song named after the first line:

I used to think that I should watch TV

I used to think that it was good for me

Wanted to know what folks were thinking

To understand the land I live in

And I would lose myself and it would set me free

I took a walk down to the park today I wrote song called, “Just Like You and Me” I heard the jokes from the sports reporter The rival teams when they faced each other The more I lost myself the more it set me free

How am I not your brother? How are you not like me?

Ms. Clark also contributed dryly witty lyrics in her song “The Forest Awakes”:

 My heart beating still

Through the perilous night

The bombs burst in air

But my hair is all right

 So Why Am I Reading This, Anyway?

Funny you should ask.  We stumbled across yet another thumb poked in the eye of the alternative investment industry in the New Statesman:  the article The Zombies of Mayfairnot to be confused with the late Warren Zevon’s song Werewolves of London. No doubt the creative artists above could come up with some great lyrics for Zombies of Mayfair.  More importantly for you, dear reader, who may now think that zero alpha is a superhuman feat, it helps to recall, as the Beatles said in Yellow Submarine, “It’s all in the mind, y’know.”

The alternative investment industry has had a challenge or two lately, some of it associated with the nature of the beast:  a hedge fund hedges.  Or so they say.  This creates a different type of performance anxiety during roaring bull markets, perhaps because some investors forget that a hedge fund isn’t totally supposed to track the market.

The other problem is uniquely associated with the nature of alpha.  Namely, everyone can’t have it all at the same time. In fact, hardly anyone can have it hardly any of the time.  You are probably amongst the elite if you’ve even smelled alpha’s gym socks.

There is an art to investing that goes beyond simple grinding due diligence.  The moment you understand that investment outperformance is linked to quality, not quantity, of perception, you’re led to step outside yourself to ask the question:  “What are these other guys seeing that I’m not? ” And that particular question can be answered partially by finding “alpha” in non-investment areas, as the intuitive part of your mind does its work away from your daily grind.

That’s why something aesthetically transformative can have effects well beyond its defined space, even in our average reader’s world of balance sheets and dancing numbers on a screen.  Pieces of work that illuminate the human condition do have relevance to humans in all fields.  And our research shows that the vast majority of our readers are, in fact, humans. Genius anywhere can be an opportunistic infection, if you allow yourself to be susceptible to it.  Sometimes genius is nothing more than walking down a street thousands have also walked on, yet seeing something none of the rest did.  Observing the genius in others might just trigger your own.

Or something.

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