CEO Sessions: Brighter future investing with Myron Scholes

Ali Dibadj: We are at the Janus Henderson ‘Insights for a Brighter Future’ conference here in Chicago. I’m very honored to have with us Nobel Laureate Myron Scholes, our Chief Investment Strategist. Myron, you’re about to get on stage talking about two topics. The first one is, what’s this complex world of investing really all about? How do we invest in it? And the second one is, how your team in particular can help our clients in managing through this complex world?

Myron Scholes: Thank you. Yeah, it’s great to be here at the conference. And one thing that I have realized over time is that risk changes and the distribution of risk is changing. And the world that you describe as being complex is a world where change occurs. And we know every day there’s new information that comes to the market, and the risks are changing. And so investors do not have the luxury of thinking about the world as drawing from the same urn all the time, risks being changing. So, in that complex environment then, you need specialists, people who are skilled in their various activities to address these changing risks and do deep analysis and thought doing it. And so, what I have enjoyed about Janus Henderson is the idea that thinking, as you said in the past, how we create a trusted advisory role where we don’t know everything. What we try to do is go more deeply into a specific thing and help them, investors, navigate this complex environment. And it only can happen through truth and trust.

One of the things that I’ve liked in terms of the philosophy that we’ve enjoyed and moving forward is that we try to think about how that truth and trust can translate into value for our investors as well. Because if the world were certain and knowable, then trust is not important. It’s when the risks are vast and uncertainty is large, then cheaters come in, or people claim things that are false. So, in a world where there’s lots of uncertainties, as we know in our complex environment today, trust is so important, and truth is part of trust. And so you have it. Don’t make excuses, but tell, be honest and how you approach things and then people go forward.

Dibadj: Now, how does your team in particular work with our clients to manage this complex world?

Scholes: What we have is two facets that we do. One is getting an idea to help them do something they can’t do. They can’t actually do dynamic risk management, because that needs a lot of expertise to take the signals that we use about the risks of the road ahead and incorporate them systematically into an approach. So they need to trust us to do that.

But at the same time, because they don’t have the expertise to do that in this changing risk that we … they trust us to help them think about how they can have a better risk management system. What they worry about is, they need a solution to their specific problem. They don’t need a product; they need a solution. It’s a risk solution, and we go in and what we have is a standard technology thatallows us to address their specific problem. Their specific problem needs a solution. Not saying, OK, we’ll give you just a product. We’ll give you a solution focus if you need that. You need trust because someone is going to come to you to solve your problem. You need this trust to achieve that well.

Dibadj: Well Myron, we’ve been very excited about your solutions offering to our clients and then folks are coming to speak with you. So thank you very much for being here and thank you all for listening.