This essay explores, through the metaphor of the water we swim in, why changes in the market environment are changing the investment strategies that may work going forward.

There are five important takeaways:

• All investors are engaged in a common myth – or narrative;

• Most investors describe the “quality” of their investment process, but this is only one part of what generates alpha; it is investment process relative to your competition which matters more;

• A strategy’s ability to generate alpha (or excess return) depends on the eco-system in which it operates. And investment alpha can only be generated relative to another dominant strategy;

• All investment strategies, even value investing, are information front-running. Widely available information reduces these opportunities;

• Idiosyncratic risk is likely the last preserve of human investment managers.