The Great Wave of Kanagawa is Hokusai’s most famous work, one of the Thirty Six Views of Mount Fuji. It depicts an enormous wave threatening boats off the coast of the prefecture of Kanagawa. The dramatic visual has, over the past 200 years, found its way onto coffee cups, mousepads and T-shirts as well as on the walls of museums and collectors worldwide. However, I have a personal affection for this image because the details surrounding the masterpiece and its creator so closely reflects our own philosophy at Optimal Asset Management.

Each image in the series features mighty Mount Fuji somewhere in the frame, placing the iconic mountain in a different context. Each new view contains a detail or insight that might be missed or considered unimportant in other views. This strikingly parallels how we analyze and build portfolios, constantly looking at each portfolio over and over, from different points of view, watching for new revelations we might have missed in other views.

The idea of using Hokusai’s Thirty Six Views of Mount Fuji as a visual metaphor for our own work first occurred to me while listening to a lecture by Dr. David Kung, a mathematician (and a musician) and a professor of mathematics at St. Mary’s College of Maryland. He explains it this way:

“Mathematicians love to look at different representations.

Mathematicians have things like algebraic representations, graphical, numerical, verbal representations. I like to think of it sort of like Hokusai’s famous woodblock prints Thirty Six Views of Mount Fuji. Hokusai was looking at the same subject, Mount Fuji, in his case, from different perspectives.

Mathematicians do this. They may take something like a parabola “y equals x-squared” and look at it from an algebraic perspective or graphical…or even a numerical perspective, with a table of numbers. Experts in mathematics effortlessly translate between these two representations, between any one of these, picking the most useful one for their purposes at that particular time.” — Dr. David Kung

Just as Hokusai did, and expert mathematicians do, thoughtful investors also utilize a wide palette of representations, picking the most appropriate ones to reveal different aspects of an investment portfolio before making an investment decision.

We need to constantly remind ourselves to look beyond historical returns and marketing fact sheets; we have several alternative views of a portfolio to examine and choose from, each of which can tell a different story.

If we aren’t paying close attention, or if we get fixated on a single view, we risk ignoring the many other views and representations, and it’s even possible we’d end up missing a “Great Wave.”

Hokusai lived a long and amazing life. He is certainly one of the most prolific, influential and successful of the Japanese woodblock masters, creating several thousand artworks, frequently switching artistic genres, styles and techniques.

Though he painted virtually every day, starting from the age of six and all the way to his death in his late eighties, legend has it that his final words were “If only Heaven will give me just another ten years … just another five more years, then I could become a real painter.”

That sort of passion for his chosen line of work and his constant drive to always find ways to do things better makes us love him all the more, and serves as inspiration for own efforts.

Vijay Vaidyanathan

OAM’s founder and CEO Vijay Vaidyanathan has a PhD in Finance and an MS (Risk & Asset Management) from the EDHEC Business School, France. He also has an MS in Computer Science from SUNY Albany and a MSc (Tech) from BITS Pilani, India and is an alumnus of IMD Lausanne, Switzerland. Previously, Vijay was the President, EDHEC-Risk Indices and Benchmarks North America where his research interests included smart beta and the role of factors and risk premia in equity markets. He holds several patents in financial micro-transactions in Digital Markets.