Peter Lynch, a very successful professional investor, is astonishingly scathing about his profession. His number one rule is to stop listening to the professionals! He is convinced that ordinary people ‘using the customary 3 per cent of the brain’ can perform just as well, if not better, than the average ‘expert’.
He really believes that there are a lot of dumb investing decisions made by those who are paid large salaries and bonuses to look after other people’s money. On the other hand the amateur has many built in advantages that could lend to market out-performance – and out-performance of the professionals. The professionals face a number of constraints that the amateur can avoid. There are social and political obstacles stopping fund managers being different from the crowd. If they take a chance and it turns out badly then they will be blamed – it is better for them to go along with the crowd. Then, there are all the institutional rules and regulations that prevent rational investing:
The Oxymorons Lynch and Warren Buffett use this term to describe professional fund managers, who they think fail to qualify as investors as they understand the word. What is it that these pe
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Glen ArnoldI'm a full-time investor running my portfolio. I invest other people's money into the same shares I hold under the Managed Portfolio Service at Henry Spain. Each of my client's individual accounts is invested in roughly the same proportions as my "Model Portfolio" for which we charge 1.2% + VAT per year. If you would like to join us contact [email protected] investing is about making the right decisions, not many decisions.
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