Sustainable

From the Wall Street Journal:

"The nation’s largest public pension fund has a retention problem, an especially pressing issue given the deep hole it and other retirement plans are in.

The California Public Employees’ Retirement System has burned through six chief investment officers over the past two decades."

Often, institutions are revered as superior investors to the public. But they are ultimately subject to many of the same challenges as any other investor, one of which is consistency. 

If leadership is turned over on a regular basis, it impacts everything. It's likely to undermine cohesive asset allocation, strategy, investment philosophy, execution, communication and overall decision making. And no amount of mental horsepower is enough to overcome it - it's too big of a factor.  Anecdotally, Calpers performance has lagged behind that of its peers for much of the past dozen years.

There's a reason sports organizations try to emulate teams like the Spurs and Patriots. Pop and Bill are obviously great at what they do. But the sheer willingness of the organization to have that leadership in place for decades has been the most important factor in their sustained success. And it's not all smooth sailing (I did, after all, witness the Patriots play on Monday night.) But the best organizations are willing to see through it and prioritize the bigger picture.

It's easy as an investor to frequently react to everything going on around you. Make a move now, feel like you did something constructive, deal with the ramifications later. But it's a difficult way to achieve sustained success. You won't win the title every year, but you'll be in the conversation regularly. Few can attest to that.

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^{Source: Calpers Seeking an Investmet Chief With Staying Power}