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Avoid The $12.5 Million Ego Mistake
This is Porter’s Daily Journal, a free e-letter from Porter & Co. that provides unfiltered insights on markets, the economy, and life to help readers become better investors. It includes weekday editions and two weekend editions… and is free to all subscribers.
Editor’s note: Today, Porter turns the Journal over to Pieter Slegers… Pieter is founder of Compounding Quality, a Substack platform with more than 1.5 million readers. Among those readers are Amazon (AMZN) founder Jeff Bezos, NBA star LeBron James, real estate investor Jared Kushner, and Pershing Square Capital CEO Bill Ackman. On average, Pieter’s portfolio has returned 20% annually. But, he says, apply his investing strategy to small and micro-cap stocks, and the results skyrocket. He calls these investments Tiny Titans.
Many pros don’t beat the market… Avoid ego investing… High-quality small caps way outperform the market… The small-cap stock screen… Join the conversation on September 18… The day Lehman collapsed… Silver has a ways to go… |
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You know what’s kind of sad?… 90% of investors underperform the market.
Over 15 years, only 8% of professionally managed funds beat the market.
There is something fundamentally wrong with Wall Street. The industry charges high fees and buys and sells way too much.
As Warren Buffett said:
Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.”
And I should know… I used to work in the industry myself.
Just hear me out for a second… I managed an equity fund for an asset-management firm. On February 22, 2021, I was pitching the fund to 300 bank managers. I still recall one of the questions I received regarding a company the fund invested in that makes bicycle parts and fishing gear:
Pieter, I see your fund invested $10 million in Shimano. What’s the key investment thesis for this company?”
I froze for a second. I wanted to give him the honest answer. But then I saw my boss in the crowd. So I started building up my case on stage: Shimano dominates the market for bike gear, the company is still family-led, it has a healthy net cash position…
The person who asked the question was satisfied.
But me? I felt terrible.