One of our favorite investors at The Acquirer’s Multiple is Francois Rochon at Giverny Capital. According to the firm’s website, Rochon’s U.S. Portfolio has an annualized return of 14.8% since 1993 compared to the S&P 500 of 9.2%.
Rochon wrote a great paper for investors called the Keys to Successful investing, which provides eight rules to become a successful investor.
My personal favorite is rule #8 which is:
Gates Capital Management's ECF Value Funds have a fantastic track record. The funds (full-name Excess Cash Flow Value Funds), which invest in an event-driven equity and credit strategy, have produced a 12.6% annualised return over the past 26 years. The funds added 7.7% overall in the second half of 2022, outperforming the 3.4% return for Read More
What differentiates successful investors from others is not related to intelligence, but rather related to attitude. Warren Buffett often uses the adjective RATIONAL to describe good investors. Rational investors do not let themselves be influenced by fads or crises. Aside from a rational attitude, another important quality (and one apparent in Warren Buffett) is the capacity to always want to learn and progress. The world is in a perpetual state of evolution and it is not easy to for someone to also constantly evolve. To be in a constant state of learning, one must not only be passionate for their art, but also humble. Without humility, there is no opening for something new. Therefore, paradoxically, successful investors must be able to combine both a high confidence in their judgment while also remaining constantly humble. A difficult and fragile equilibrium.
Here's an excerpt from that paper:
If stocks represent the asset class that has generated the most wealth over the long term, why is it that so many investors fail to realize good returns with the stock market? Here are a few keys, according to Giverny Capital, that could help you in increasing your likelihood of success.
1- Consider stocks as fractional ownership in real businesses
2- Being present
3- Profit from market fluctuations rather than suffer from them
4- Leaving yourself a margin of safety
5- Stay within your circle of competence
6- Know when to sell
7- Learn from your mistakes
8- A constructive attitude
You can find the complete document here.
This article was originally published at The Acquirer's Multiple - Stock Screener.