There are 3 types of personal edges:
- 1. Homework: Most retail investors simply don’t do it. CNBC, ET Now and Twitter are interesting. Earnings calls, and annual reports are boring.
- 2. Value Investing Theory: Sell-side analysts are awesome at homework. In fact, if you listen to concalls, you’ll realize how thoroughly they cover a company (although, stock prices don’t always reflect that).
You see, most of them become analysts after MBA, because it pays well. Not because of deep passion for value investing.
Hence, they remain weak at value investing theory. Which is the source of judgment.
- 3. Patience: Fund managers have the judgment. But don’t have the patience. Because of the pressure to match benchmarks.