Our investment philosophy is simple - be humble:
- Markets are highly competitive, with large numbers of investors spending huge amounts of time and money trying to find mispriced securities;
- As a result of this intense competition, markets are reasonably efficient and hard to "beat";
- Only investors with a unique competitive advantage have the potential to consistently outperform the market - finding those investors in advance is tough, especially as last year's outperformers can often be this year's underperformers;
- We are all prone to make mistakes, whether through panic, greed, hubris or otherwise, which tendencies must be acknowleged and taken into account in any investment approach;
- Costs matter: investors who trade frequently pay more brokerage, bid-ask spread costs, potentially make more mistakes and realise more short term capital gains than low turnover index funds and index ETFs.
- All that matters is after-costs, after-tax returns that actually end up in your pocket.
Given the above beliefs, which are supported by experience and countless research studies, humility in the face of picking outperforming managers and investments is warranted - the future is unknowable.