Heuristik Capital

The Heuristik team are experienced behavioural investment specialists. Our investment process leans on decades of evidence-led thinking of the role of cognitive psychology in markets, beginning with the work of Daniel Kahneman back in the 1970s. We don’t think it is possible to predict the future with any meaningful degree of precision. As far as we can tell, no one is very good at it. On average, 65% of sell-side analysts have a yearly earnings forecast error of above 10%. Over the past 20 years, in the year before a recession, the IMF has failed to predict a single one. We prefer to play a different game. We study the mistakes of those who make a living trying to forecast a company’s future – sell-side analysts. We are particularly interested in persistent error patterns that indicate bias. We spend our time understanding the business models and conditions that lead to bias. We will be launching a new long-only portfolio consisting of rare, high-quality companies we believe can surprise sell-side analysts and investors over the long term. In the meantime, follow The Heuristik Blog to hear about how we apply behavioural insights to market trends.