One City Built to Last

y peter suciu
Paladin
a Different Methology
Medieval history is filled with
the stories of “paladins,” those
knights renowned as champions
for their heroism and chivalry. While Paul
Evans may not be part of any royal court,
he does have a serious pedigree that has
helped him truly understand the ins and
outs of the financial world. For investors
today, that might just be better than a
knight in shining armor.
Evans, who has been around the securities business for
quite some time, could be considered a “credentialed individual.”
He told The Suit that he cut his teeth as a British
public accountant and trained with the Arthur Andersen &
Co. before earning his MBA at Stanford. Evans then made
the transition to a planning and investment firm advising
high net worth individuals, most of whom came from Silicon
Valley.
“In the early 1990s, I started my own business doing the
same sort of thing, but with a different methodology,” said
Evans. “I started advising people to invest by diversifying
internationally. This was a little progressive in the early
1990s – not a lot of people were doing that then.”
His theory was that – while much investing was being
done in a fairly stable world – if one diversified correctly,
the swings in markets would be compensated so that upswings
in one market would compensate for downswings
in another.
“Indeed, international markets proved for extended periods
that there were higher returns than those in the United
States,” he added. “You got both low volatility and as a result,
through diversification, you got higher returns.”
As president and managing partner at Paladin Capital
Management, Evans also insists on avoiding jargon.
“In the first 20 years I was involved in the business, nobody
talked about Alpha. A few people talked about Beta,
but they were regarded as strange individuals,” Evans explained.
“Now we have this whole lexicon of terms that
would have been very strange to investors in, say, 1980. In
some ways that is a disadvantage, as we've made the whole
thing more complicated than it needs to be – and that is very
frightening for the investor,” he observed.
“Thirty years ago, you'd approach a stock broker and
expect him to find six hot ideas for you. That has been replaced
by people who take a longer term view,” Evans added.
“They have to, given their longer term financial needs.
This is why diversification has really taken over.”
While there was a lot of panic following the downturns of
2008-09, he also maintains this was just one in a long succession
of setbacks that have occurred since World War II.
In suggesting that the best strategy might be to step away
from the crowd, Evans said, “Be enthusiastic, but when the
crowd becomes enthusiastic – you need to be anxious.”
www.paladincap.com
THE SUIT MAGAZINE - NOV 2014