Read on Twitter
Know your circle of competence / comfort zone and stay within it, no matter the context, environment or peer pressure.
For instance, I rarely do tech (unless I have downside protection) because it’s subject to rapid change / winner-takes-all factors and unpredictability. Plus the valuations tend to be very rich (understatement) as growth expectations are very aggressive over a long time horizon.
I tend to focus on small quality not-so-cyclical industrials with repeat/recurring revenues and high niche market shares. It’s often not as glamorous but it’s easier to understand, more predictable with valuations often more attractive and growth prospects that can be nice too.
I try and invest in what does not change rather than what’s subject to rapid change. It can seem foolish or old-school or even boring at times but I feel more comfortable, sleep well and have done OK so far.
Of course, this approach is not going to result in high double digit annualized returns. If I get between 10 and 15% after-tax annualized returns over a long term horizon, it will be a very satisfactory outcome. More like a get-rich-very-slowly-and-quietly approach.
