One value Investor or Group of value investor, which is better?

1

Question:-
1.I have always had this question and strangely I started see a pattern lately, I like to know if you can share views on the same.

I always remember Howard mark’s comment that
1.if you follow crowd then you will get average result but for different results you need to do different. But problem being different is if you are right you will get very good results and but being wrong you will bad results i.e. less than average. For first order it is ok, but if start looking in second order that if youa re right one out of say 10 times but the payout in one time is so high that it will offset other nine then the above theory is not correct in second order.

2.But I started looking at the post of value pickr, I started seeing pattern that when VP posted good idea (One value investor) and if other value investor’s dicussed about it and everyone one agreed on it before idea is tested. It normally should give average result as Howard marks said we need second order thinking to beat market but I won’t agree on this statement of Howard marks during extreme events of market.

3.Personally I saw that if just read the Headline of Post and do complete analysis, it worked out very well in cases, I see conviction of holding the stock is more but if we read the complete post with lot of comments and then do complete analysis then I always get biased for following reasons

  1. Confirmation bias
    2.I started realizing the investing is more to assigning weights to different factors and then making decision on which is dominant in this company as different organism survive at different places due to different environment factors but we need to understand that basic DNA remains same i.e. ROIC, debt for company etc.

  2. Also,there is other way do we need to just coattail people who has proven record of above average results and just buy the stock when idea is working this is important, I see that it also works but only problem with it we need to exit the stock when person actually exists.

But I am still very confused which is good one value investor or group of value investor, In fact I am not sure which will win beacuse there is so many variable of system and outcome changes based on linearity of variables.

2

You will not become a good investor unless you can do complete analysis on your own and form a view and take a decision completely on your own.

Note that it’s a different thing to make money and to be a better investor. A good investor bets when the odds are in his or her favor but that doesn’t mean that the outcome is always good (may not always make money). A mutual fund investor makes money but that doesn’t mean he or she is a good investor

1 Like
3

There is nothing called as a “group of value investors”. Even if two investors have a largely common portfolio, the allocation will vary, yielding very different results. You need to take your own decisions always.

4 Likes
4

Great lecture by Li Lu.

1 Like