Janwillem, how would you describe your job as Chief Economist?
I see myself in many senses as a kind of compass. I provide you with orientation through clear-cut and simple-to-understand information based on thorough analysis and deliberation. Part of this is giving you a global view of what is going on economically, as well as sharing advice and knowledge about the major trends and risks so that you can make decisions that are appropriate to your specific situation.
You must do a lot of reading in order to get all the information you need to do your job…
You can only provide orientation if you yourself are not lost. For me that means constantly looking out for information. I am lucky and very thankful to be able to rely on the expertise of many highly talented colleagues in the bank’s research network. In addition, I dedicate one day per week, Saturday, to reading. My family is very nice with me and knows that on that day, I have a pile of papers, newspapers, and other material to go through. Knowing what’s going on in different countries and being familiar with the background of developments is also important, so I read beyond just the economic news.
How does that information flow into your job?
An economic scenario is constantly, dynamically being replaced and modified. This means, in a team context, that we have to continuously adjust our perception, or what we call our baseline scenario, using the information available to us. We also have alternative risk scenarios to help orient the Bank and our clients in terms of potential changes in the economic environment. Change is part of the game. Our job is kind of like building a Gothic cathedral; as a team, we build the architecture of a message, and we are constantly working on it – we are constantly replacing stones to make sure the structure remains intact.
How did you become an economist?
Originally, my background was in statistics. I was one of those nerds churning out numbers at university, working with computers and models. I’m talking about the 70s when I was a very young student and programmed punch cards. During my studies, I realised more and more that what was behind these figures was our daily life in many dimensions. So you just have to properly analyse the figures to get, sometimes even hidden, insights into what is going on in this world. I have been an economist now for 35 years, and I still love the work, it fascinates me.
What are some of the most common mistakes you see investors make?
I am convinced that greed tends to switch off the brain. So being greedy should be avoided at all costs. Also, people can get carried away by media and extreme views that are sometimes disseminated in times of tension, instead of trusting their own, mostly healthy, common sense.
Is there any advice you like to give clients?
Because I’ve observed so many people and events over the years, I have developed a very simple framework for myself that I call the IWP principle, or Invest With Ps. It’s a concept that I like to share with clients. IWP is straightforward and centres around what I see as the key ‘Ps’ to investing. First, you should have poise when you invest, or in other words, have a relaxed and humble attitude. Second, invest with a plan or purpose, so know about your investment, be aware of the risks involved and what you want to get out of it. Then, be prudent and patient – not greedy and impatient. Sometimes an investment has to mature like a good wine, so it may take time. And finally, once you’ve incorporated all of these Ps into your investment approach, you find yourself investing with pleasure. I think investing can be a lot of fun and very rewarding, and I believe that following the ‘Ps’ can make it even more so.
Is there another area that you can offer expertise in?
History has always fascinated me, and I’ve done a lot of private research in that area. I like to read biographies of historical figures, especially when I’m on holidays. During one of those holidays, I read a 1000 page biography of Churchill – if there’s one famous person from the past I would like to get stuck with in a lift, it’s him. He was a great personality and strong character, with many specific idiosyncrasies, who blossomed at an age when many actually retire – and that during the catastrophic period of the Second World War, when he led his desperate nation to withstand and finally defeat Hitler’s horrible regime.
My interest in history also gives me a lot of details and background information that I can use in my job. So, it’s a nice hobby to combine with my professional activities. Economists critically look at the now, and try to look forward, but understanding how we got to the now is the crucial part of the story, enabling a qualified guess of what may lie ahead of us.