Why I'm a Better Investor Than You Are
Let me first say that the title of the post may not be true, but it sounds more compelling than “My Competitive Advantage as an Investor” -- it did pull you in, didn’t it? By popular request (from 2 people!), I’m going to discuss my potential sources of competitive advantage as I seek superior returns in the public stock markets. They are two-fold:
1. An unusual mix of scientific and liberal arts educations. I’ve studied Mathematics and Statistics to a decent level and I also have training in less formal disciplines such as Politics, Philosophy and Economics. This yields an advantage in that people tend to choose one mode of thinking over the other, whereas equity investing can best be approached using both types of thinking. This relates to Charlie Munger’s concept of the latticework of mental models.
2. Bi-cultural upbringing. I was born into a bi-cultural family, was educated in three countries under two educational systems and have worked in the U.K., Japan and the U.S.A. You might conclude that I have an obvious advantage in investing internationally, but I think the real benefit of my background is much more powerful. Growing up and living in several countries has taught me that the ways in which people view reality is influenced by the culture in which they live, as well as the one in which they are educated. This creates all sorts of subtle biases, which can have an effect on how accurately you model reality and the quality of your decision-making based on your models. The magnitude of these biases can vary dramatically by culture (compare how growing up in North Korea might impact your view of the world versus growing up in England, as I did) and by individual. Having straddled several countries/ cultures gives me a leg up in identifying (and hopefully, avoiding or eliminating) these types of bias.
I hope this was not too abstract and gave you some sense of where I feel my advantage lies. I recommend every investor go through the process of trying to identify their competitive advantage. If you cannot find one, you should either (a.) seek to develop one; or (b) delegate your investments to someone who already has one. Best of luck!
I went way over today in terms of time, but I think the topic merited careful attention if it was to yield any value for readers at all.
Total: 386 words
Time: 29 minutes
*** The above text was written in ten minutes. As a result, some of it may not stand up to rational scrutiny. I apologize preemptively for any errors, omissions and misrepresentations. ***