The principle of “managed” investment trusts is absolutely sound, granted only one premise. The premise is that there are somewhere people of such experience and insight that they can predict with some sort of accuracy the future behavior of securities.
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My own opinion is that the selection of individual securities is a matter partly of a special kind of judgment and insight, and partly of a good deal of security analysis training.
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The more you trade, the harder it is to add value because you’re absorbing a lot of transaction costs, not to mention taxes.
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If discounting terrific things are already in the stock, I don’t want to own it.
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I always thought if you looked at ten companies, you’d find one that’s interesting, if you’d look at 20, you’d find two, or if you look at hundred you’ll find ten. The person that turns over the most rocks wins the game.
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No stock picker knows so much that he can’t learn a trick or a tip from a peer.
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If your only reason for picking a stock is that an expert likes it, then what you really need is paid professional help.
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The whole trick of the game is to have a few times when you know that something is better than average and invest only where you have that extra knowledge.
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Only novel “soft-shelled” ideas produce extraordinary returns, because the obvious ideas are already reflected in a stock’s price.
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I want a company that’s simple. They don’t have to make seven brilliant decisions every six months to keep going.
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I’ve always found that if you find 10 stocks you really like and buy three, you always pick the wrong three. So I just buy all 10.
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It may be that professionally managed funds are too large a part of the total picture to be able to outperform the market as a whole; it may also be true, as I suspect, that certain weaknesses in their basic principles of stock selection tend to offset the superior training, intelligence, and effort that they bring to this task.
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