Investor’s Edge – Satellite Driven Returns

Features | Education | 14 Mins Read | by


Whether private investors can outperform investment funds (active or passive) is up for debate. But they do have one key advantage - the ability to selectively invest in the best ideas. This is the most powerful advantage that exists.

What's nice about investing is that you don't have to swing at pitches...You can wait for the pitch you want.  - Warren Buffett

To put it another way

Only invest in stocks if you have great stock ideas to invest in

The logic of the above two quotes is compelling. How can we carry out this approach in practice?

The easiest method is to have an investment default. An approach we turn to when we don’t have great ideas.

Funds are the easiest default strategy (passive or active) because they require relatively little thought. On this basis the investment approach becomes:

Invest in funds unless you have great stock ideas to invest in.

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