My return to the finance-reading journey has been smooth so far. After finishing Buffett’s 30 years of letters, I went on to read all of Terry Smith’s, which I believe I’ll write about them again on next article, and then I read a book a friend of mine wrote, Geoff, called ‘Low Risk Rules’. Geoff is a writer on Substack and has a long experience as a portfolio manager, I’d suggest you give his articles a look:
Funny how Marks has said that the "high risk = high reward" hypothesis makes no sense. I'm sure he's aware of study. Because clearly it doesn't hold a candle to current research.
The research on returns by market cap also make a lot of sense. I have a lot of small caps in my PF, and I'm fully aware and accept the volatility that accompanies it. But I feel this gives me an edge in terms of return that I wouldn't be able to get from holding large caps.
Its pretty scary how difficult it is to keep up a high earnings growth! This lends credence to if you find something that can outperform, you'd better hold onto it for dear life. You may have a once in a lifetime winner on your hands.
Thank you very much! All very valid points my friends. I was quite surprised with the first one because it plainly contradicts all finance theory. On the second one I agree with you actually and I believe these kinds of studies support your investment philosophy, which is great to know. On the last one, I was extremely surprised. I wasn't expecting 10% growth to be that unsustainable.
Great article G!
Funny how Marks has said that the "high risk = high reward" hypothesis makes no sense. I'm sure he's aware of study. Because clearly it doesn't hold a candle to current research.
The research on returns by market cap also make a lot of sense. I have a lot of small caps in my PF, and I'm fully aware and accept the volatility that accompanies it. But I feel this gives me an edge in terms of return that I wouldn't be able to get from holding large caps.
Its pretty scary how difficult it is to keep up a high earnings growth! This lends credence to if you find something that can outperform, you'd better hold onto it for dear life. You may have a once in a lifetime winner on your hands.
Thank you very much! All very valid points my friends. I was quite surprised with the first one because it plainly contradicts all finance theory. On the second one I agree with you actually and I believe these kinds of studies support your investment philosophy, which is great to know. On the last one, I was extremely surprised. I wasn't expecting 10% growth to be that unsustainable.
Thanks Giuliano!
If anyone is interested in learning more I offer a free chapter when signing up for my Substack, and you can find the book here: https://www.amazon.com/Low-Risk-Rules-Preservation-Manifesto/dp/1774581744/
I'd be happy to discuss offline as well.
Thank you for spreading the word on such interesting research!