In an article at FutureBlind, Max Olson suggests there are at least six basic areas in which an investor can acquire an edge: Psychology – through discipline, patience and avoidance of common biases and misjudgments. "This is an extremely difficult advantage to have," says Olson, "but is possibly the most common one among good investors." Analysis – through the ability to look at the same data as everyone else and come to a more accurate conclusion. "Probably the advantage that most investors think they have, but which I believe it’s the most difficult one to gain an edge in." Information – through better or more privileged access to information. Includes information obtained as a company insider, and illegal use of insider knowledge. Inefficiency – by investing in inefficient, less liquid market segments, including privately held businesses, microcaps, illiquid stocks, and hard-to-understand-or-predict situations. Risk management – the ability to limit portfolio risk through asset ...
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