Every investment manager, since the beginning of time, promotes the success of their winners while deliberately distracting investors from the losers.

I get why they do it. They want to look good. It makes perfect sense. I’d probably do the same if I were in their shoes. Just highlight the good stuff and ignore the bad stuff.

At the risk of sounding naïve, I wish managers would own their mistakes and talk to us about problem investments. Don’t bury it on page 107 of the annual report. Don’t conceal it in the appendix.

Emphasizing how great your realized investments were? That’s fine. But acknowledge the mistakes with the same amount of detail and description.

Be up front and explain what happened. Talk to us about the mistakes, what you learned, and what, if anything, will change going forward.

We see the overall return data. We know by cherry-picking a handful of winners there’s likely an equal number of losers dragging the fund down. Don’t pretend like it doesn’t exist.

I would have a lot more comfort (i.e. higher future commitments) if managers would open up about the mistakes. But they never open up. It’s like closing your eyes and pretending the world outside you doesn’t exist. Of course it exists, and pretending like it doesn’t only makes you worse off.

Of the hundreds and managers and funds I reviewed in my career, I can think of one or two that own their mistakes and deliver a direct, BS-free explanation. For all the others, I’m playing a cat and mouse game of trying to extract the truth from the marketing spin.

Maybe they’re afraid to get sued. Maybe they’re afraid to say the 3 hardest words in investing, “We don’t know.”

I’m under no illusion that this will change. But perhaps in the future, the ability to talk about the bad stuff will be normalized.