It’s widely known (although somehow still controversial) that investment
managers who try to manually pick stocks cannot beat the market the vast
majority of the time:
That is even without the fees that active investment managers charge, which are
usually 1% or more (which is horrendous long-term when subtracted from compound
Those high fees are part of the problem – investment managers need to do
something special to justify them. If the investment manager takes the sensible
choice of just buying broad market indexes and holding long-term, how can they
justify their fee? The client could just do that themselves and pay far lower
I was thinking that there might be a similar effect with a lot of software
Software engineers are expensive. At the same time, many common software
engineering problems now have standard, boring solutions that are well understood and easy to use.
Yet there is surprisingly widespread resistance to just using these standard
solutions – many software engineers prefer to apply their ingenuity and do
something clever instead.
This is so widespread that at this point in my career I now consider it a rare
skill to be able to accept boring,
simple solutions where they are appropriate.
Of course, we frequently encounter situations that do require advanced skills
and deep knowledge, and that is where software engineers should be delivering
the highest value.
As an industry we frequently seem to lack the ability to distinguish the truly
complex problems from the low-hanging fruit where the ratio of cost to benefit
should be massively in our favour. Instead we pile on unnecessary complexity
Perhaps this is a cousin of the “fee justification” problem in the investment
Do software engineers have the same "fee justification" problem as investment managers?