Praise where praise is due

Admitting a mistake is one of the hardest things to do. However, when you have lost your own and other people’s money in that mistake, it must be even harder.

I met Mark Pignatelli, the manager of the Smith & Williamson European Growth Trust, who told me his previous venture, running long/short money at Rebus Capital – a company he established – had not gone as he envisaged. The skill of running short money proved harder than he anticipated.

After four and a half years of trying, Pignatelli, a former European manager at Barings and Schroders, called it a day and returned to the long-only world.

You have to praise a manager for making such an admission, and he is not alone. Many long-only mangers have fancied a crack at running short money, and many have come unstuck, discovering that running long and short money are two very different skills.