Insights about how we can invest successfully for the future can come from snippets from interviews of great invsetors. In here, I’d be covering useful portions of interviews from a trio of investors who have demonstrated outsized performance over long periods of time. I shared the first snippet on Thursday and the second snippet yesterday (you can find them here and here). Here’s the third one, and it comes from Pat Dorsey. Dorsey spent over a decade at investment research outfit Morningstar and helped build and expand a team of analysts at the company from ten to more than a hundred….
Insights about how we can invest successfully for the future can come from snippets from interviews of great invsetors.
In here, I’d be covering useful portions of interviews from a trio of investors who have demonstrated outsized performance over long periods of time.
Dorsey spent over a decade at investment research outfit Morningstar and helped build and expand a team of analysts at the company from ten to more than a hundred. He is also known for his work in sharpening the definition of economic moats. I have also previously shared his work on useful investing checklists.
Without further ado, here’s what Dorsey has to say about the future of investing:
“One of the dangers people in the value investing community often fall into is slavishly following Uncle Warren and Grandfather Ben, and sort of worshipping at their feet.
But investing’s not like that, Buffett himself has said that investing is a learning process, and if you look at what he does today it’s very different from what he did fifteen or twenty years ago.
People often mistake having an intellectual discipline for being stubborn. When you cross that line from having a philosophy you believe in to ignoring the way the world changes, you’re not doing yourself any favours as an investor.”
In this snippet – where Dorsey refers to Warren Buffett and Ben Graham as Uncle Warren and Grandfather Ben, respectively – he stressed the importance of investors being able to grow intellectually over time.
This comes from understanding the limits of your investing philosophy, and expanding your circle of competence as you progress.
Dorsey also made a key point on the difference between sticking to your philosophy and being blindly ignorant towards changing information and facts. There is a fine distinction between the two.
Taking the words of past investors as irrefutable gospel without any critical thinking being done on our part is one way to limit ourselves from moving forward as investors.
For instance, sticking slavishly to single financial ratios – like investing in a share only if it has a low price to earnings ratio – could have excluded you from some of the biggest winners in Singapore’s market over past decade.
That’s all I have for you this week. Hope you enjoyed it!
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.