Wednesday, December 2, 2015

Keys to successful investing...

From Marathon Asset Management's Neil Ostrer in an interview with Vanguard last year, and probably worth taping on a wall next to your desk:
There are three keys to successful investing. First, being a contrarian with a long-term perspective is very important. Second is the ability to be open to new ideas combined with a skeptical approach to those people incentivized to sell these new ideas. Third, having the ability to focus on what matters, while ignoring what doesn't, is important. 
Adding more information to an investment thesis may improve confidence in a decision but not necessarily accuracy. Dr. Herbert Simon, 1978 Nobel Prize winner, is quoted as saying, "A wealth of information creates a poverty of attention." 
That idea is particularly important to bear in mind in a time when information, data, and models are becoming more complex and readily available, yet the percentage of active managers with a track record of outperformance relative to the market hasn't increased.

[H/T Corner of Berkshire & Fairfax]


Related books:

Capital Account: A Fund Manager Reports on a Turbulent Decade, 1993-2002

Capital Returns: Investing Through the Capital Cycle: A Money Manager's Reports 2002-15