At some point, I followed someone into investing into Kinsale capital. Now, insurance is not something I understand. It works different from “normal” companies. I sold it shortly after, because I couldn’t figure it out like I’m able to figure out a normal company. Owning the stock felt like gambling to me personally. It taught me to stay within my circle of competence. Learning every day.
I think that's a great move. I have not invested in it yet because my lack of knowledge of insurance. If you don't feel comfortable, you'll never be able to hold on to the stock when the sh#%t hits the fan...
Generalist or specialist? History reflects that specialists are more successful based upon career results and money earned…but they also tend to be boring conversationalists!
My response is to be an investment generalist, but with one core area of specialisation AND to have a little black book of known sector specialists who you can correspond freely with. The core area I believe specialisation (or at least a deep grasp of the fundamentals) is required would be financials…otherwise how can you interpret the report ability of the other investment sectors.
I had to laugh when I read the first sentence. My wife reminds me of this when she attended parties 20 years ago with my fellow engineers. They were quite boring 😀I too have a book with an investment network. It might be even more important than your own circle!
Agreed, expanding the circle of competence is very important. Also, just having a circle in competence in something, doesn't always means it directly translates into owning profitable stocks.
Looking at the car rental or airline industries, both are heavy liability, competitive, high cost industries, and the stocks in those industries reflect that.
Yes, so no travel related stocks for me ever........even with Avis trading at a P/E of 9, with some of the best customer service in that industry, the industry in general is just too unpredictable
At some point, I followed someone into investing into Kinsale capital. Now, insurance is not something I understand. It works different from “normal” companies. I sold it shortly after, because I couldn’t figure it out like I’m able to figure out a normal company. Owning the stock felt like gambling to me personally. It taught me to stay within my circle of competence. Learning every day.
I think that's a great move. I have not invested in it yet because my lack of knowledge of insurance. If you don't feel comfortable, you'll never be able to hold on to the stock when the sh#%t hits the fan...
the cheapest bank is not this one, its monte dei paschi in italy, p/E of 2 after a lot of events
I had heard of it, but never gave it a good look...
Monte is reported as the oldest bank in the world, but it has long been beset with problems.
Generalist or specialist? History reflects that specialists are more successful based upon career results and money earned…but they also tend to be boring conversationalists!
My response is to be an investment generalist, but with one core area of specialisation AND to have a little black book of known sector specialists who you can correspond freely with. The core area I believe specialisation (or at least a deep grasp of the fundamentals) is required would be financials…otherwise how can you interpret the report ability of the other investment sectors.
I had to laugh when I read the first sentence. My wife reminds me of this when she attended parties 20 years ago with my fellow engineers. They were quite boring 😀I too have a book with an investment network. It might be even more important than your own circle!
Cool article Kevin.
Agreed, expanding the circle of competence is very important. Also, just having a circle in competence in something, doesn't always means it directly translates into owning profitable stocks.
Looking at the car rental or airline industries, both are heavy liability, competitive, high cost industries, and the stocks in those industries reflect that.
While industry does not determine destiny, I agree you could increase your odds by avoiding airlines and the like
Yes, so no travel related stocks for me ever........even with Avis trading at a P/E of 9, with some of the best customer service in that industry, the industry in general is just too unpredictable