I thought this was a brilliant piece by James Montier of SocGen and wanted to share it with you with some added comments of my own.
Ten Tenets of My Investment Creed
1. Value, value, value Value approach minimizes the risk of overpaying for the hope of growth. (I would add to this don't buy things just because they are 'cheap' because they could just get cheaper)
2. Be contrarian Sir John Templeton observed, "It is impossible to produce superior performances unless you do something different from the majority"
3. Be patient wait for the fat pitch, value managers' have the curse of being too early
4. Be unconstrainedWhile pigeon-holing and labelling are fashinonable, Iam far from convinced that they aid investment. Surely I should be free to exploit value opportunities wherever they may occur.
5. Don't forecast Forecasting is like relying on your seriously flawed ability to soothsay.
6. Cycles matter Howard Marks says, "we can't predict but we can prepare" (I would add, be aware of the cycle you are in and the one you are about to enter).
7. History matters The four most dangerous words in investing are "This time is different"
8. Be skeptical Learning to question what you are told and developing critical thinking skills are vital to long term success and survival
9. Be top-down and bottom-up Both viewpoints matter, either has a monopoly on insight.
10. Treat your clients as you would treat yourself the ultimate test of an investment is would I be willing to invest with my own money? (Do unto other's as you would have done unto you).
Ten Tenets of My Investment Creed
1. Value, value, value Value approach minimizes the risk of overpaying for the hope of growth. (I would add to this don't buy things just because they are 'cheap' because they could just get cheaper)
2. Be contrarian Sir John Templeton observed, "It is impossible to produce superior performances unless you do something different from the majority"
3. Be patient wait for the fat pitch, value managers' have the curse of being too early
4. Be unconstrainedWhile pigeon-holing and labelling are fashinonable, Iam far from convinced that they aid investment. Surely I should be free to exploit value opportunities wherever they may occur.
5. Don't forecast Forecasting is like relying on your seriously flawed ability to soothsay.
6. Cycles matter Howard Marks says, "we can't predict but we can prepare" (I would add, be aware of the cycle you are in and the one you are about to enter).
7. History matters The four most dangerous words in investing are "This time is different"
8. Be skeptical Learning to question what you are told and developing critical thinking skills are vital to long term success and survival
9. Be top-down and bottom-up Both viewpoints matter, either has a monopoly on insight.
10. Treat your clients as you would treat yourself the ultimate test of an investment is would I be willing to invest with my own money? (Do unto other's as you would have done unto you).
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