Speaking at the Morningstar Investment Conference in London, the partner at Baillie Gifford and manager of Scottish Mortgage Investment Trust said that “short-terminism” and excessive overconfidence meant many fund managers had failed their clients.
Contrary to what some may believe, he added that no one can effectively predict stock markets, and that constant speculation had blurred the ability of many to pick the best investments.
He said: “Apparently all analysts and investors know to the nearest cent what a company will earn next quarter. It is just not true. All we can do is make some comments that may tilt the odds in our favour.
“Some think that by sitting in front of a screen you are likely to find good investment solutions, but what you are is a prisoner of noise and a target.”
Mr Anderson referenced the speculation last year that Cyprus was set to “condemn the world” only to disappear from public discourse and be replaced by similar fearmongering in Ukraine.
He added that such “noise” had caused investment markets to be obsessed with the short-term, which was tragic and representative of the way companies were run.
He said: “The way the financial system has developed is tragic. We are only interested now in recent one-year performance and the financial benefits of that. That leads to lower returns for investors as companies are being run in the wrong way.”
Paul Gibson, chartered financial planner for Aberdeen-based Carbon Financial Partners, said: “We are investors not speculators, so want to allocate money to capital markets for the long term and not jump in and out depending on the direction of the market. Everything begins with academic research, empirical evidence and data.”