STREET DOGS: Investing
Trying to gather information that is supposedly unknown to other investors doesn’t always improve your investment decisions - on the contrary
Trying to increase your confidence by gathering information that is unknown to other investors only makes you more comfortable with your investment decisions, not better at them, and can be an unproductive use of your time. Seth Klarman says in his book Margin of Safety that some investors insist on trying to obtain perfect knowledge about impending investments, researching companies until they think they know everything there is to know about them. They study the industry and the competition, contact former employees and analysts and become acquainted with top management. They analyse financial statements for the past decade and stock price trends for even longer. This diligence is admirable, but it has two shortcomings. First, no matter how much research is done, some information remains elusive; investors have to learn to live with less than complete information. Second, even if an investor could know all the facts about an investment, he or she would not necessarily profit. This...
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