Dublin-based Noel O’Halloran knows a lot about turbulence and safety margins, having qualified with a first-class engineering degree in the mid-1980s and after working as an aeronautical engineer with Aer Lingus for three years.
“It brings logical thinking, a strong application to numbers and a general sense of pragmatism, which has been extremely beneficial in making investment decisions,” he says.
On the downside, his team sometimes jokes that he “craves to draw diagrams any time he talks to them in terms of explaining something, rather than verbalising it”.
“The other thing to be aware of is that engineering is a science. Either something works or it doesn’t. A bridge is going to stand up or it’s going to fall, and an aircraft is going to fly or it’s not. Obviously, markets aren’t 100% scientific and there is undoubtedly an art to them as well.”
Signs and wonders
Subsequently moving into the world of finance, and now chief investment officer of Kleinwort Benson Investors, O’Halloran has seen 27 “dramatic” years of bubbles and crises “so hopefully the next 27 are a bit calmer”.
One current consideration is whether the FTSE 100 index exceeding its all-time high is a worrying sign.
He argues here that robustness of earnings and the fundamentals in the market support the valuations.
“The upside to markets is clearly less than it would have been a couple of years ago, but markets have definitely continued to climb the proverbial wall of worry since 2009. It’s been one of those stealth bull markets that everybody’s been bearing on the whole way through.
“What would worry me much more is if everybody was rationalising why it was terrific to have the FTSE at an all-time high and why it was absolutely appropriate.”