Edge In Investing

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By Master Invest Class

“Investors operate with limited funds and limited intelligence; they do not need to know everything. As long as they understand something better than others, they have an edge” George Soros

“I was recently on a panel that was asked what gave our firms their edge. One panellist responded “we have 160 analysts around the world”. To me, that response demonstrated a total lack of insight. Unless those 160 analysts are more astute than the average investor, they’ll contribute nothing. Certainly another 160 wouldn’t double the managers ability to add value (if they could everyone would be an analyst)” Howard Marks

“Every investor should be in a position where they can identify what their edge is” Seth Klarman,

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“The person who is better prepared, the person who has done the most work, has a huge edge because most people are lazy.” Marc Lasry

“Both poker and investing are games of incomplete information. You have a certain set of facts and you are looking for situations where you have an edge, whether the edge is psychological or statistical.” David Einhorn

"You have to figure out what your own aptitudes are. If you play games where other people have the aptitudes and you don't, you're going to lose. And that's as close to certain as any prediction that you can make. You have to figure out where you have an edge. And you've got to play within your circle of competence." Charlie Munger

“Your investor’s edge is not something you get from Wall Street experts. It’s something you already have. You can outperform the experts if you use your edge by investing in companies or industries you already understand” Peter Lynch

“Given the competitiveness of the investment business, we believe it is important in every investment to have an edge, an advantage over the herd. This edge could be a willingness to take a long-term perspective in a short-term-orientated market, a tolerance of complexity when others crave simplicity, or the absence of constraints which either impede the ability of others to act or force them to act in uneconomic ways” Seth Klarman

“If you’re going to come to the poker table, you’re going to have to beat me. … We have 1500 people who work at Bridgewater. We spend hundreds of millions of dollars on research and so on, we’ve been doing this for 37 years.” Ray Dalio

"In order to invest, we need to understand why the opportunity exists and believe we have a sizeable analytical edge over the person on the other side of the trade" David Einhorn

"Our equity focus will remain on those situations where we have an identifiable edge.  The edge may come from superior insight derived from deep research, but it can and often does, come from the ability to take advantage of market dislocations and investments others don't want to or, for a variety of reasons, can't" Jim Mooney

"Always try to find an edge…" Israel Englander

"There are a lot of trends going on now that make the business very tough.  You've had a lot of smart people come into it, making it much harder to find opportunities.  You need to determine what your real competitive advantage is" John Phelan

"Having an edge will help you make money in stocks" Peter Lynch


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