Science and investment ideas progress slowly... death, retirement, and failure

 

Science progresses not necessarily through bright new insights but "through the old professors dying off" - Eugen von Bohn-Bawerk

"Investment ideas progress not through new ideas but through management retiring...."  

"Investment ideas fall from favor through one major drawdown at a time only to return as the next style sees a major drawdown..."

This Bohn-Bawerk made his quote when referring to his precocious student Joseph Schumpeter, the other great economist from the first half of the 20th century, Keynes is the better-known name. 

I have taken liberties to apply the idea to investments. Embedded investment ideas will only change when the old guard retires. Management must understand an idea before it is accepted which means it usually has to be learned at an earlier age in some MBA or business class.

If not retirement, investment ideas will fall out of favor with the first significant drawdowns. Drawdowns are failure signals which have to be replaced with a new idea. Idea chasing is ongoing with most money management firms. Failure will beget change which will be replaced after another failure.