Bottom-up
Stock Picking is equivalent to seeing people as individuals and communities
rather than abstract prejudices. It’s easier to simplify people and businesses
into races, nations, and asset classes. It’s lazy. A bottom-up stock picker has
a universe of thousands of public businesses from around the world to choose
from. For most, you can afford to put them in the “Too Hard Pile”. You don’t
have to have an opinion on everything, and you can admit ignorance on the vast
majority of hard questions. You can gradually build an opinion on the endurance,
resilience, and creativity of enough businesses to allow a margin of error. The
first question is always, “what if I am wrong?”. Fundamental Investing isn’t
about predicting the future. It is about creating an environment for
sustainable growth in a world that is complex, ambiguous, and random. The key
is time. You buy yourself time through consistent investing in strength,
flexibility, and control. The peaks and troughs become the inevitable and predictable
chapters in a much longer story of staying alive, and making a contribution to
the conversation.
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